By Stella Odueme
The Managing Director and Chief Executive Officer of the Bank of Agriculture (BoA), Mr. Ayodeji Oludare (Ayo) Sotinrin, has said the bank is prioritising impact over profit by ensuring that agricultural loans are used strictly for farming activities and not diverted.
Speaking during an interactive session with agriculture correspondents in Abuja on Thursday, Sotinrin said the bank had introduced a financing model under which approved loans are largely disbursed in kind through accredited input suppliers rather than directly to beneficiaries.
According to him, farmers are free to choose their preferred suppliers, provided they deal with verified vendors that supply genuine agricultural inputs.
“We are a bank. We give loans to people who qualify. What we don’t do is allow borrowers to buy inputs themselves with the loan. Once a farmer specifies the quantity and type of fertiliser or other inputs required, we pay the supplier directly, while only about five per cent of the loan is released in cash to cover logistics and other incidental expenses,” he said.
He explained that the arrangement was designed to prevent diversion of subsidised agricultural loans, noting that unrestricted cash disbursement could encourage beneficiaries to invest the funds elsewhere instead of farming.
Sotinrin stressed that the bank’s primary objective was to support agricultural production and food security rather than maximise profits.
“We prioritise impact before profit. We have a responsibility to our shareholders, but we must ensure that the funds are used properly and achieve the intended purpose,” he said.
The BoA chief disclosed that the bank had already financed millions of bags of fertiliser and distributed thousands of metric tonnes of seeds to farmers under its various intervention programmes.
He added that farmers with proven repayment records and successful farming operations would be eligible for larger credit facilities to expand their businesses.
Sotinrin said the bank was also working through commodity aggregators and agribusinesses rather than dealing directly with every individual farmer, describing the approach as more efficient in reaching genuine producers across the country.
According to him, the strategy has enabled the bank to penetrate farming communities in remote areas while reducing the influence of politically connected beneficiaries.
He noted that although many of the bank’s interventions had not received significant media attention, the institution had recorded substantial progress in expanding access to agricultural finance.
The managing director revealed that the bank was leveraging its network of 110 branches nationwide to improve outreach and process more loan applications.
On risk management, Sotinrin said the Bank of Agriculture had adopted comprehensive insurance cover for financed agricultural projects to protect both farmers and the institution against production risks.
He disclosed that the bank currently bears about 40 per cent of the insurance cost for projects under its financing programmes.
He also said the bank was engaging security agencies on measures to improve the safety of farming communities, including initiatives that would encourage closer collaboration between farmers and security operatives to address insecurity affecting agricultural production.
Sotinrin reaffirmed the bank’s commitment to expanding access to affordable agricultural finance while ensuring transparency, accountability and improved productivity across Nigeria’s agricultural value chain.
