In a bid to catalyse a major funding arrangement for the nation’s agricultural sector, the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) and Union Bank Plc, has launched a N10 billion agribusiness financing scheme.
The scheme would see NIRSAL derisk lending to the agricultural sector in a major move to leapfrog the sector.
The scheme, which is for the 2018 farming season is designed to boost agricultural productivity and modernisation through enhanced lending to the sector.
NIRSAL’s Managing Director, Mr. Aliyu Abdulhameed, who spoke at the launch in Abuja, said it was in a continuation of his organisation’s resolve to fully transform the agricultural sector.
The NIRSAL/Union Bank partnership, he stated, would cover NIRSAL-supported projects in livestock and crop production, agricultural mechanisation, logistics and poultry, among others.
The partnership would see NIRSAL provide credit guarantees of up to 75 per cent of Union Bank loans for bankable agricultural projects, leveraging its $300 million risk-sharing facility.
If the funds are fully utilised,
Abdulhameed said this would create about one million direct jobs and several indirect jobs, just as the incomes of rural farmers would receive a boost.
He noted that NIRSAL was passionate in rejuvenating the agricultural sector, adding that the federal government’s flagship programme, Economic Recovery and Growth Plan (ERGP) specifically alluded to his organisation’s pivotal role.
He said: “This partnership is not only on making finance available to the relevant stakeholders but will also provide technical support for them through NIRSAL’s $60 million technical assistance facility.
“We will provide a wide range of support to improve agricultural productivity, teaching best agricultural production best practices and providing effective capacity building to both farmers and Union Bank officials at our own cost.
“We are doing all these to ensure maximum deployment of funds, efficient utilisation of the money and 100-per-cent recovery.
“It is, indeed, vital that we learn from the various schemes where finance was provided which turned out to be unsuccessful.
“But with NIRSAL, we hope to get 100-per-cent recovery and, therefore, complete the cycle back to the banks,’’ he said.
According to him, the scheme had been designed, not only to facilitate the beneficiaries’ access to finance but also to ensure that they succeeded and paid back the loan.
He disclosed that this year, NIRSAL had succeeded in getting commercial banks to devote N60 billion of their capital to finance agricultural businesses across the country.
Abdulhameed urged commercia banks with low lending to the agricultural sector to commit more of their funds into agriculture lending so as to boost the country’s food security.
In his remarks, the Group Managing Director of Union Bank Plc, Mr. Emeka Emuwa noted that agriculture is a critical component of the economy.
While applauding NIRSAL for its strides in the sector, he stated that the initial N10 billion capital earmarked for the scheme would be expanded gradually as soon as milestones were achieved.
“What we want to do is to boost agricultural productivity with the much-needed credit lines. So, our focus will be on enhancing post-production, boosting capacity, aggregation and market expansion to cut post-harvest losses and provide market access for smallholder farmers.
He added: “If you think of Nigeria, there are more than 180 million inhabitants and almost everyone eats at least once a day. That tells you the scope of the opportunities which exists in agriculture.’’ He noted that the sector is the largest employer of labour in Nigeria and the African continent.