By Favour Nnabugwu

The Central Bank of Nigeria (CBN) has approved N75 billion for the take off of Nigerian Incentive-Based Risk Sharing in Agricultural Lending (NIRSAL).

The apex bank has also guaranteed 75 per cent loans provided by Deposit Money Banks to farmers across the 36 States of the Federation and the Federal Capital Territory as part of concerted efforts to transform the agricultural sector.

Head of NIRSAL Project Implementation Office under the Development Finance Department of the 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, 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 mobilizes financing for Nigerian agribusiness 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 8(?1.5 billion), and Bank incentive mechanism (?15 billion).

“NIRSAL will share risks with banks ranging from 30% to 75% of loss depending on the segment. We are prepared to offer following terms to farmers in the States and FCT Abuja: 75% guarantees on all input, working capital and limited living cost loans to plant the crop, and loan duration should be about 24 – 28 months,” he noted.

The loan guarantee is being packaged under the, a public private established by the CBN, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development.

Earlier, the Minister of State for FCT, who welcome the CBN delegation to her Office, 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,” said Oloye Akinjide, who was represented by the Director of Treasury in the FCT Administration, Alhaji Ibrahim Bomai.

The minister stated that the six Area Councils of the FCT have been directed to identify and key into the value chain commodities to be promoted in their respective area of jurisdiction. She added that the FCTA had commenced the implementation of the Growth Enhancement Scheme of Federal Ministry of Agriculture & Rural Development in order to empower the farmers in the territory.