Agricultural Lending: Unity Bank Partners Binkabi
Unity Bank Plc has struck a partnership with Binkabi, a blockchain-based commodity trading network, to improve lending to the agriculture sector in the country.
The Head, Risk Management and Compliance, Unity Bank, Mr Usman Abdulqadir, said the collaboration would also help to provide end-to-end solutions for farmers and the entire agribusiness value chain.
Abdulqadir, who spoke at the launch of an agro commodities trade platform, said, “By way of strategy, we look at the various value chains across the agric sector, and why some banks prefer to concentrate on certain types of customers – the very big ones with little or no risk exposure – we lend across the entire value chain.
“What we are doing today is just to integrate all the various components of the value chain into one single entity to have an integrated approach to funding the agric sector. We have a huge portfolio of primary production; as we speak today, about 40 per cent of our entire loan portfolio is in one aspect of agriculture or the other. We are the leading bank in funding primary production; we are also deepening agriculture mechanisation.”
According to him, one of the problems in the agric sector that has inhibited banks from lending to the agric sector is the difficulty in accessing risk.
Abdulqadir said the partnership with Binkabi would help to improve risk assessment, transparency and liquidity.
He said, “We welcome the partnership with Binkabi because it is a platform for bringing all players in the sector into one space and increasing transparency in the system so that there is price discovery. It is also bringing in liquidity into the market and naturally making things easier. For us, we see a huge opportunity in that regard.”
The Co-Founder and Chief Operating Officer, Binkabi, Manrui Tang, said the platform would help to address the issues associated with lending to the agricultural sector.
“We are a platform for issuing trading and financing commodities on blockchain. We connect with banks, warehouses, commodity exchanges, logistics companies and farmers, aggregators and all parties in the supply chain. We streamline the entire commodity end-to-end trading and financing process for the benefit of farmers and the SMEs to make this entire lending, borrowing and trading process to be automated, secured and profitable for them,” she said.