By Emma Ujah, Abuja Bureau Chief
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL, has secured over N14.5 billion banks’ commitment to agricultural lending in the last five months.
According to the agency, in Abuja, yesterday, further commitments, worth N48 billion, are at various stages of approval.
NIRSAL said it was engaging banks with a view to constituting Joint-Technical Committees with NIRSAL to pursue this new and innovative agriculture/agribusiness financing framework.
The agency said the prior perception of agriculture being a high-risk area by banks was gradually giving way to a new-found faith in the new business opportunities the sector has to offer.
“Going forward, the enhanced understanding of NIRSAL’s role in securing a safe, profitable and a globally competitive agribusiness economy is expected to elicit greater portfolio commitments from Nigerian banks in sponsoring the NIRSAL-led Agribusiness initiatives and developing joint frameworks aimed at facilitating a greater flow of finance to structured, agriculture-related investment opportunities in Nigeria,” it said.
So far, the NIRSAL risk-led agricultural financing approach is adjudged to be in high resonance with Banks Risk/Return imperatives.
NIRSAL has made extensive presentations on its Agribusiness models, financing frameworks, Tools, Techniques, Methodologies and Partnerships in meetings with Union Bank, Sterling Bank, Guaranty Trust Bank, GTBank, United Bank for Africa, UBA, Keystone Bank, Standard Chartered Bank, Heritage Bank and Unity Bank over the last five months.
It said that more banks and other financial institutions have expressed interest to be engaged in the subsequent phases over the coming weeks.
Bank’s average lending to the agriculture sector had stalled at less than 3% of total bank lending, over the years, leaving it largely underdeveloped and its vast potentials for economic growth untapped.