Access to finance is one of the major challenges impeding the growth and survival of start-ups, existing farming activity and SMEs. This challenge is greatly responsible for the slow growth experienced by a large number of farmers and SMEs which consequently affects access to agricultural inputs, machinery, and employment of quality management staff. In spite of the numerous agricultural incentive schemes instituted by the Federal Government to tackle this challenge, farmers and SMEs in the Niger Delta are still facing various challenges which suppress their ability to access funds to improve their productivity and efficiency. PIND’s Access to Finance project is aimed at addressing the inherent binding constraints as regards access to finance faced by the SMEs and farmers in the market development projects. Through this project, we provide funds to Micro Finance Institutions (MFIs) and work with them to build the capacity of SMEs to access the fund at a controlled interest rate.
In the Aquaculture sector, the Access to Finance project seeks to facilitate increased access and usage of financial services and products by fish farmers/fish farmer groups as well as supporting effective linkage between farmers and financial institutions.
Objectives are as follows:
- Train and support fish farmer groups to develop bankable income generating project proposals
- Improve return on investment by BMOs
- Improve linkage between financial institutions and fish farmers/fish farmer groups
- Improve the knowledge and capacity of financial institutions to provide finance to BMOs
- Improve the knowledge of finance and accounts management, group management capacity and Business and entrepreneurship skills of BMOs
So far, we have conducted series of training on leadership and group dynamics as well as financial management for three Farmer groups – UUFA, Liberty fish farmers MPCS and UPFFA – which have successfully changed the mindset of these fish farmers and fish farmers’ associations and helped improve their capacity to meet the loan requirements of financial institutions.
We have also recorded an increase in the number of Micro Finance institutions Providing Services to Small Farmers and also an increase in the number of loans Accessed by BMOs/Small farmers. Microfinance banks have successfully disbursed loans of N12.6 Million to three fish farmers associations and these loans have been repaid. We crowded in a new MFB LAPO Microfinance bank which has successfully disbursed loans of over 80 Million Naira to fish farmers in Ughelli, Delta State. As at 2015, a total of 56.2 Million Naira has been lent to 141 farmers with farmers through our work, with loan repayment rates of almost 100%.
We conducted an effectiveness survey which revealed remarkable impact and change in knowledge and practice of beneficiaries including the creation of additional 18 direct jobs as a result of the project. We will continue working with financial institutions to ensure more sustainable lending to farmers to enable them grow their businesses.
“The first time of lending to UUFA was like tilling soil – hard work. The second time it was easier, we all have to learn. The vision is for us to have impact on the farmers, do business with farmers, and especially work with those who are serious about farm business”
LAPO Micro Finance Bank