The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has entered into a N50Billion agriculture financing partnership with Stanbic IBTC Bank for the 2017/2018 dry and wet season.
This is in continuation of its efforts to boost agricultural productivity and modernization by facilitating increased bank lending to the sector.
The partnership will cover NIRSAL supported projects in livestock, crops, mechanization, logistics and poultry.
STANBIC IBTC has committed an initial N10billion for the take-off of the scheme. The amount is to be expanded gradually as milestones are achieved.
The first phase of the scheme is projected to create over 92,000 direct jobs, impact about 200,000 lives, boost incomes of rural farmers and complement government’s efforts to drive inclusive economic growth through agriculture. It will also lead to the cultivation of an additional 11,195 hectares of arable land, increase the National Food Output by up to 50,580MT in yield and provide N3.87bn value addition.
The Managing Director of NIRSAL, Mr Aliyu Abdulhameed, and his counterpart in STANBIC IBTC, Dr Demola Sogunle, signed the Memorandum of Understanding (MoU) at an event to mark the take-off of the scheme in Abuja on 15th September 2017.
Under the terms of the partnership, NIRSAL is to provide credit guarantees to cover up to 75 percent of STANBIC IBTC loans to bankable agricultural projects using its $300M Risk Sharing Facility.
Speaking about the scheme, Mr Abdulhameed stated that the partnership is in line with NIRSAL’s mandate to attract private sector finance to agriculture.
His words: “This partnership marks the start of NIRSAL’s long term collaboration with STANBIC IBTC to ensure that commercial agriculture is entrenched and made a mainstream occupation.
It is a testament to our shared vision for agriculture as a profitable enterprise and a key driver of the Nigerian economy. We are committed to providing STANBIC IBTC with the cover to lend to agriculture and are happy that its management has agreed to partner with us on this project”.
He further added that NIRSAL as a policy tool of the Central Bank is collaborating with financial institutions such as STANBIC IBTC to drive growth in the agriculture sector as part of its institutional contribution to achieving the objectives of the economic recovery growth plan of the Buhari administration.
Mr Abdulhameed attributed the increasing confidence of banks to partner with NIRSAL to the strong support of the Central Bank Governor, Mr Godwin Emefiele.
The scheme is designed not only to enable access to finance by beneficiaries but to ensure that they succeed and pay back the loan. It includes a provision for NIRSAL to provide technical assistance on best agricultural practices, facilitate access to inputs such as fertilizer, seedlings and other relevant modern practices.
NIRSAL will also use its project monitoring offices located in each state of the country to closely monitor projects to ensure that they are executed in line with approved standards.