Enugu – The implementation of the Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) will commence in March, an official of the Central Bank of Nigeria (CBN) has said.
Mr Kingsely Moghalu, the bank’s Deputy Governor, disclosed on Sunday in Enugu that a number of steps were being worked out to ensure that beneficiaries were able to access the account.
NIRSAL is a N450 billion special credit portfolio set aside by the CBN as its own contribution to the Agricultural Transformation Agenda of the Federal Government.
Moghalu said the CBN was now finalising a Memorandum of Understanding (MOU) with the Federal Ministry of Agriculture and Rural Development that would define the role of CBN and what the partnership was meant to achieve.
He said the MoU was important because it would provide an implementation platform for some of the policy issues that need to be addressed, if,lending to the agriculture value chain was to be successful.
“This is a critical success factor which must be put in place before NIRSAL can deliver.
The deputy governor listed a number of issues such as land reform act, legal framework for insurance and also practical ways to support farmers to transit from subsistence to commercial farming were also being looked into.
He said that the apex bank had set up an implementation office for NIRSAL and that by June, the office would be converted to a non-bank financial institution that would be capitalised to drive the scheme.
Moghalu said as at now, some states including Zamfara, Edo, Rivers, Ekiti, Kwara, Lagos, Ogun, Delta, Kano, Sokoto, Nasarawa and Benue had sent their Expression of Interest in NIRSAL to the CBN, while the bank was having series of discussion with other states.
He expressed the hope that this would become a nationwide programme that all the stakeholders would key into.
Moghalu said that the successful implementation of NIRSAL had the potential to additionally generate not less than N464 billion of bank lending within a period of 10 years and increase agricultural lending from the current 1.4 per cent to 7 per cent total bank lending.
He explained that all the commercial banks operating in the country constitute lending channels through which NIRSAL’s fund would be disbursed to beneficiaries in a risk sharing manner with the CBN. (NAN)