NIRSAL, STANBIC IBTC partner on N50bn agric financing scheme
In continuation of its efforts to boost agricultural productivity and modernisation by facilitating increased bank lending to the sector, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has entered into a N50 billion agriculture financing partnership with Stanbic IBTC Bank for the 2017/2018 dry and wet season.
The partnership will cover NIRSAL-supported projects in livestock, crops, mechanisation, logistics and poultry.
STANBIC IBTC has committed an initial N10 billion 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 additional 11,195 hectares of arable land, increase the National Food Output by up to 50,580MT in yield, and provide N3.87 billion value addition.
Aliyu Abdulhameed, managing director, NIRSAL, and his counterpart in STANBIC IBTC, Demola Sogunle, signed the Memorandum of Understanding (MoU) at an event to mark the take-off of the scheme in Abuja at the weekend.
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 $300-million Risk Sharing Facility.
Speaking about the scheme, Abdulhameed said the partnership is in line with NIRSAL’s mandate to attract private sector finance to agriculture.
“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 testament to our shared vision for agriculture as a profitable enterprise and a key driver of the Nigerian economy,” Abdulhameed said.
“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 said.
Abdulhameed further said NIRSAL, as a policy tool of the Central Bank of Nigeria, 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, attributing the increasing confidence of banks to partner with NIRSAL to the strong support of the CBN Governor 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.
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