NIRSAL Part­ners Union Bank on N10bn Agric Fi­nanc­ing Scheme

THISDAY - - BUSINESS WORLD - Ndubuisi Fran­cis in Abuja

In a bid to catal­yse a ma­jor fund­ing ar­range­ment for the na­tion’s agri­cul­tural sec­tor, the Nige­ria In­cen­tive-Based RiskShar­ing 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.

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