To expand lending to 3.8 million farmers by 2026
The Nigerian Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), plans to facilitate about N60 billion in fresh commercial bank lending to farmers in the current financial year.
The agency also said it will execute the $300 million African Development Bank, AfDB’s Youth Enable Programme, and operationalising the $500 million Mechanisation Partnership with the Brazilian Government and a host of others.
The moves are geared toward enhancing access to credit by farmers as well as making agribusiness more attractive to the youths to curtail the high rate of rural-urban migration.
The Managing Director of NIRSAL, Aliyu Abbati Abdulhameed, disclosed this in Lagos, last week, while delivering a paper titled: “Powering Nigerian Agriculture Through Innovative Financing: The NIRSAL Edge” at the BusinessDay Agribusiness & Food Security Summit 2017.
In a statement from the agency, Abdulhameed also expressed NIRSAL’s readiness to play its role in the realisation of the economic recovery plans, while listing its key plans for the year.He said: “NIRSAL’s broad objective is to increase lending to 3.8 million farmers by 2026 through cooperatives and value chains.
“NIRSAL also plans to reduce the break-even interest rate to agribusiness borrowers from 22 per cent to between 7.5 per cent and 10.5 per cent.”Commending the Federal Government’s efforts in making agriculture one of the six priority sectors of focus in the Economic Recovery Growth Plan (ERGP), the NIRSAL boss said the decision is the right one because agriculture has unrivalled capacity in job creation, poverty reduction and inclusive economic growth.
He noted that the current economic context and the changing global economy demanded that Nigeria moved with greater urgency to fix agriculture.He said the agency’s readiness to play its role, is a tribute to the farsighted vision of President Muhammadu Buhari, the leadership of Godwin Emefiele, the Governor of the Central Bank, and the active support of Chief Audu Ogbeh, the Minister of Agriculture and Rural Development.
Abdulhameed asserted that the Buhari administration’s strong emphasis on agriculture is very evident in the series of practical programmes and initiatives, with support for agencies such as NIRSAL underscoring this clear commitment.
In his words: “It is heart-warming indeed that the Federal Government is going beyond the much talked about potential of agriculture to actually demonstrating, through practical policies and initiatives that it is committed to transforming agriculture for the good and progress of the country.”
Abdulhameed argued that NIRSAL is a key part of the government’s multi-pronged strategy to move agriculture beyond potential to significant progress, adding that its role is to help solve the longstanding problem of inadequate financing of the agricultural sector by leveraging its $500 million fund to incentivise lending to the sector.
According to him, NIRSAL does this by ‘de-risking’ the agricultural financing value chain, building long-term capabilities and institutionalising agricultural lending through risk sharing with banks, technical capacity building as well as the provision of incentives to encourage bank lending.
Speaking on the impact of NIRSAL on lending to agriculture while operating as a transition office between 2012 and 2016 – a period he termed as, NIRSAL 1.0, Abdulhameed said the institution provided bank guarantees totalling N64.142 billion for agricultural projects.
Similarly, he said NIRSAL facilitated bank finance worth N695million ($3.5 million) for the purchase of 227 tractors to Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN), and Small Scale Women Farmers Organisation, to ensure access to tractors at low prices.
Also, within this period, NIRSAL boosted capacity of commercial banks by providing technical training for 187 bank desk officers, 185,000 farmers and 205 extension workers across the country.
Abdulhameed informed participants at the summit that NIRSAL is now fully staffed, and is ready for full operations nationwide. He announced 2017 as marking the start of NIRSAL 2.0, a period he said will be defined by pro-active action and deployment of strategic projects that will fix lingering problems in the agricultural value chains and create impact.
Also present at the event were Senator Heineken Lokpobori, Honorable Minister of State for Agriculture and Rural Development, Prof. Ruerd Ruben, Research Coordinator Food Security, International Value Chain & Impact Assessment at the Agricultural Economics Institute of Wageningen University, the Netherlands and Alhaji Sanni Dangote of Nigeria Agric Business Group (NABG) amongst others.