By Abolaji Adebayo
In a bid to ease farmers’ financial challenge in order to boost agricultural productivity, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), in collaboration with Union Bank, has allocated N10 billion for agriculture financing in the 2018 farming season.
The Managing Director, NIRSAL, Aliyu Abdulhameed, disclosed in Abuja the the budget was targeted at developing and mechanizing agricultural sector for economic growth through the support of financial institutions.
Abdulhameed, who spoke at the launch of the scheme on Friday, explained that the NIRSAL-Union Bank partnership would cover NIRSAL-supported projects in livestock and crop production, agricultural mechanization, logistics and poultry.
He further explained that under the terms of the partnership, NIRSAL would provide credit guarantees to cover up to 75 per cent of Union Bank loans for bankable agricultural projects, using its 300-million-dollar risk-sharing facility.
The NIRSAL boss maintained that the funds, if fully utilised, would create about one million direct jobs and many more indirect jobs, while boosting the incomes of rural farmers and complementing government’s efforts to drive inclusive economic growth through agriculture.
“This partnership is not only on making finance available to the relevant stakeholders but will also provide technical support for them through NIRSAL’s N60-million-dollar technical assistance facility.
“We will provide a wide range of support to improve agricultural productivity, teaching best agricultural production best practices and providing effective capacity building to both farmers and Union Bank officials at our own cost,’’ he said.
He said that the scheme would ensure maximum deployment of funds, efficient utilisation of the money and 100-per-cent recovery as well as complete cycle of the fund back to the banks.
He urged deposit money banks with low lending to the agricultural sector to commit more of their funds into agriculture lending so as to boost the country’s food security.
Meanwhile, the Group Managing Director, Union Bank, Emeka Emuwa said that the initial N10-billion capital earmarked for the scheme would be expanded gradually as soon as milestones were achieved.