A partnership between Propcom Mai-karfi and First City Monument Bank (FCMB) has led to the approval and disbursement of tractor loans to 67 members of Tractor Operators and Hiring Facilities of Nigeria (TOHFAN) by the bank.
The tractor market in Nigeria is worth about NGN250 billion. However access to tractors and usage remain low. Limited financing for farmers or service providers to purchase tractors is a major constraint. As a result, the UK aid-funded Propcom Mai-karfi partnered with commercial bank FCMB to develop a low risk financing and guarantee framework to enable the bank provide loans for tractors to members of TOHFAN.
In May 2014, FCMB disbursed a trial 27 tractor loans to members of TOHFAN. Following this pilot and the commitment shown by TOHFAN towards repayment to the bank, FCMB has disbursed another 67 loans to the association ahead of the 2015 planting season.
At an event held in Zaria on May 7, 2015, 67 members of TOHFAN received Mahindra, Holland or John Deere brand of tractors from FCMB. The loans will be paid back at an agreed rate over a 30 month period.