The Central Bank of Nigeria (CBN) yesterday restated its resolve to guarantee 75 per cent loans provided by Deposit Money Banks to farmers in the 36 States of the federation and the federal capital territory (FCT) as part of efforts to transform the agricultural sector.
The loan guarantee is being packaged under the Nigerian Incentive-Based Risk Sharing in Agricultural Lending (NIRSAL) – a public private established by the CBN, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development.

A statement from the Special Assistant (Media and Publicity) to the Minister of State for FCT, Oluyinka Akintunde, quoted the Head of NIRSAL Project Implementation Office under the Development Finance Department, CBN, Mr. Jude Uzonwanne, stated this in Abuja at a presentation on the role of NIRSAL to the Minister of State for the Federal Capital Territory, Mr. Oloye Olajumoke Akinjide.
Uzonwanne stated that the guarantee would be issued by the NIRSAL to the farmers in the states and FCT through commercial banks and other financial institutions.

He explained, “NIRSAL mobilises financing for Nigerian agro-business by using credit guarantees to address the risk of default. NIRSAL is a flexible financing tool designed to change the behaviour of financial institutions.
“It covers all crops and livestock activities in Nigeria, while driving improved investment outcomes and job creation. It is also building on a legacy of previous CBN interventions in agriculture that has helped create thousands of jobs.”

He stated that the CBN programme was designed to create access to finance by integrating end-to-end agriculture value chains such as input producers, farmers, agro dealers, agro processors and industrial manufacturers with agricultural financing value chains – loan product development, credit distribution, loan origination, managing and pricing for risk, and loan disbursement.

“The integration is driven by NIRSAL’s 5 pillars, particularly the Risk Sharing Pillar and the Technical Assistance pillars such as Risk sharing Facility (₦45 billion), Insurance Facility (₦4.5 billion), Technical assistance facility (₦9 billion), Agricultural bank rating scheme (₦1.5 billion), and Bank incentive mechanism (₦15 billion),” he noted.

Earlier, the Minister of State for FCT assured that NIRSAL was cardinal to the success of the Federal Government’s Agricultural Transformational Agenda (ATA) as it was established to address the grey areas inhibiting agricultural growth in Nigeria.
“NIRSAL under the ATA seek to address all the technical, administrative and financial needs of the farmers along the selected agricultural value chain commodities in which the country has comparative advantage,” he added.

Source: ThisDay/Obinna Chima