In her bid to carry out its mandate, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in collaboration with Union Bank of Nigeria has launched a N10billion Agricultural Finance Scheme.
The scheme is geared towards increasing commercial banks lending to agriculture by making the sector a profitable investment destination.
The Managing Director of NIRSAL, Mr. Aliyu Abdulhameed and Mr. Emeka Emuwa of Union Bank signed the Memorandum of Understanding (MoU) on Friday, 10th November in Abuja.
At the event, the Managing Director of NIRSAL stated that “the launch of this scheme marks yet another major step by NIRSAL to increase commercial bank lending to agriculture. We had set a target this year of getting commercial banks to commit N60billion of their balance sheet to agribusiness.”
The essence is to increase the success rate of agricultural projects that are helping to mitigate investment risk in the agricultural sector, which is giving banks comfort to lend.
He added that NIRSAL has deployed project monitoring offices nationwide, set up technology driven field monitoring systems, institutionalized a technical capacity support framework and created links and collaborations with research institutions.
In fulfilling its obligation, NIRSAL will provide Credit Risk Guarantees for the loans provided by Union Bank on the back of its $300 million risk-sharing facility.
The Credit Risk Guarantees will range between 30-75% of the loan value, depending on the dynamics of the project in the agricultural value chain.
NIRSAL will also leverage its Project Monitoring, Reporting and Remediation Offices (PMRO) located across the 36 states in the country in order to ensure proper use of the loans and success of the projects.
The categories of the qualifying agricultural projects that would benefit include primary production, agro processing, mechanization, inputs supply, logistics/haulage, storage and post-harvest handling, and preselected value chains.