The Managing Director of Heritage Bank, Mr Ifie Sekibo, has attributed the inability of most exporters of agricultural produce to secure bank funding to poor understanding of the process.
In a statement in Lagos, Sekibo said that banks looked for certain criteria before financing which most exporters had failed to master.
According to him, there must be a history of previous performance in terms of volume of exports handled in the past.
sekibo said that these factor included frequency of export, payment methods, payment terms, how products are sourced and how risks were mitigated.
He said banks also looked at seasonality of the products, product destination, transaction cycle and buyer’s payment history.
Besides, he said most exporters faced challenges of inadequate infrastructure to control products’ quality and lack of dependable source of local product prices.
“There is the challenge of supplier information, too many players in the products supply chain and the challenge of fraudsters in the product supply chain.
“Other challenges are delay and risk of haulage due to bad roads, no exchange platform to facilitate product sourcing , reluctance of buyer to accept a secured payment terms and method like letter of credit,” he said.
The News Agency of Nigeria (NAN) reports that Heritage Bank recently got 150 million dollars from the African Export Import Bank (Afreximbank) to assist agro exporters.
Sekibo urged the Federal Government to encourage the export of non-oil product in a period of recession.
He reiterated that some of the products included cocoa, cashew, groundnut, fish, horns, sesame seed, ginger, cassava, snails, tobacco, coffee, cotton lint and rubber.
He also identified bitter leaf, plantain flour, ground melon, ground crayfish, groundnut, maize among possible foreign exchange earners.
Sekibo said farmers and exporters of agricultural produce should seek more knowledge on how to increase the quality and quantity of their products.
The bank chief said the 10-year tenor export stimulation facility provided by the Central Bank of Nigeria (CBN) at nine per cent interest rate was a laudable incentive for exporters.
According to him, the banks will want the economy to grow by lending to farmers and other productive sectors of the economy.
Sekibo said that farmers, borrowers and exporters on their part should know that banks wanted their monies back and that “there is need for competence, commitment and confidence in the process.”
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