This document presents Community Development Foundation's wholesale lending strategy for agricultural financing in Nigeria. It discusses how previous government interventions and programs have largely failed to meet farmers' credit needs. The strategy proposes channeling loans through apex institutions like credit unions and cooperative societies to reach more smallholder farmers. This wholesale approach leverages local financial intermediaries that farmers are already familiar with. It aims to strengthen rural financial institutions and promote best practices in agricultural lending while overcoming the high costs that discourage banks from direct rural financing. The strategy's benefits include its ability to reach more farmers through bulk lending while building efficient local institutions. Its challenges include ensuring funds are effectively disseminated and maintaining institutional quality.

1. Wholesale Lending Strategy
Community Development Foundation Experience
Presented by
Mr Akin Akintola
Executive Director
Community Development Foundation
In
Fin4: Revolutionising Finance for Agri-value Chains Conference
At
Kenya School of Monetary Studies
Nairobi, Kenya
15 July 2014

2. Introduction
• Agricultural Financing has always been a
challenge despite various government
interventions, policy support and in many
cases, establishment of specialized
institutions
• In Nigeria, there is a long history of efforts
to meet the farmers credit needs and to
support agricultural value chains.
• However most of the interventions have
not achieved the desired objectives and in
some cases, have failed woefully.

3. Background
Policies
• Sectorial Allocation
of Credit to the
Agricultural sector
• Agricultural Credit
Guarantee Scheme
• Microfinance Policy
Framework
• Agricultural Credit
Support Scheme
Programs
• Rural Banking
Programme
• Self- Help Group
Linkage Programme
• Family Economic
Advancement
Programme
• IFAD-Rural Finance
Programs (RUFIN)
Institutions
• Nigeria Agricultural
Credit Bank
• Nigeria Agricultural
Insurance Company
• Peoples Bank of
Nigeria
• Community Banks
• N.G.Os
• Nigeria Agricultural
Cooperative and
Rural Development
Bank

4. Background Cont’d…
• Though well conceived most programs
made little programme
• Some programs were politicised and
discontinued with
• Most of the institutions became weak and
poorly funded
• Banks circumvented policies and paid fine
instead

5. Wholesale Strategy -Target Groups
Apex institutions
• Credit Unions
• Community based Enterprises (CBEs)
• Community Based Organisations (CBOs)
• Community Development Associations (CDAs)
• Large Cooperative societies

6. Wholesale strategy
• Institutions exist locally for Financial Intermediation
• These institutions form large Apexes to leverage their
strength for greater access to funds and loans.
• Owned and managed by the beneficiaries
• Members have confidence in and are familiar with
procedures of the institutions
• Costs of loan administration are low when compared with
lending to the individuals.
• If the formal banks and other financial institutions fail,
these institution will serve.
• Apex institutions are registered providing formal coverage
for the primary constituents.

7. Wholesale strategy

8. Benefits
Reaching a greater
number with a single
lending
Leveraging on tested and
familiar institutions
Single Product
meeting different
needs
Joint assessment,
monitoring and
Guarantee
Building strong and
efficient local
institutions
Platform for future
services and
advocacy

9. Challenges
Trickle down of funds and diversion
Mixed Quality of Primary Groups
Limited Access to Individual Beneficiaries
Weak Leadership of Institutions
Politicisation and Leadership transition

10. Conclusion
• The wholesale microcredit strategy
remains one of the effective ways of
reaching the large underserved farming
and rural population
• It promotes best practices in rural finance
• Strengthens Rural Financial Institutions.
• Addresses the issue of high costs of doing
business in rural areas by banks and
microfinance institutions.

11. Appreciation
Thanks for Listening
Community Development Foundation
www.cdfnigeria.org
www.cdfnigeria.com