The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has signed a Memorandum of Understanding (MoU) with Credit Agricole Du Maroc (CAM) a Moroccan lender, to support sustainable agriculture in the two countries.
The Head, Corporate Communications, NIRSAL Plc, Mrs. Anne Ihugba, who gave this hint in a statement issued at the weekend, stated that the collaboration of the two entities based on the terms of the MoU, would be through the facilitation of finance and investment, trade and support systems across agricultural value chains with emphasis on smallholder farmers.
Ihugba stated that the NIRSAL’s Managing Director/CEO, Mr. Aliyu Abdulhameed and Chairman of the Management Board of CAM, Tariq Sijilmassi, signed the MoU on behalf of the institutions and promised their commitment to the mutual prospecting and implementation of agriculture-oriented projects that benefit both organisations and their host countries.
Speaking at the MoU signing event, Abdulhameed listed NIRSAL Plc’s areas of need as including, the development of financing products that suit the seasonality of agriculture and other farming contexts, and the difficulties smallholders are experiencing in keeping to the terms of conventional bank financing products.
The NIRSAL boss stressed that innovative financing products designed to meet the peculiarities of agricultural primary production would be of immense benefit to the agriculture lenders and other financiers.
According to him, such products will also help financiers to maximise the benefits and incentives in the 75 percent Credit Risk Guarantee (CRG) issued by NIRSAL for primary production projects and in addition to also helping diligent borrower to enjoy Interest Drawbacks (IDB) of up to 40 percent.
Abdulhameed pointed out that leveraging NIRSAL’s CRG facility commercial lenders in Nigeria had injected over N152.8 billion into the agriculture sector in the last six years, with credit crystallization rate still below one percent.
The NIRSAL boss said: “A pacesetter in the modern, innovative use of blended finance to spur the growth of agriculture has been a reference point for emerging Development Finance Institutions (DFIs) across Sub-Saharan Africa.”
He explained that his institution was ready to learn from CAM, being a more experienced institution.
The CAM is a universal bank that ‘finances all sectors, with agricultural expertise as a particular vocation within the framework of national investment programmes.
