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NIRSAL’s Credit Guarantee Scheme Unlocks N152bn to Farmers, Signs MoU with Moroccan Bank
James Emejo in Abuja
The Managing Director/Chief Executive, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc, Mr. Aliyu Abdulhameed, has said it unlocked N152 billion to farmers under the NIRSAL’s Credit Risk Guarantee (CRG) facility in the last six years with credit crystallization rate still below 1 per cent.
He also expressed confidence that the innovative financing products that speak to the peculiarities of agricultural primary production would help financiers to maximize the benefits and incentives in the 75 per cent CRG issued by NIRSAL for primary production projects, as well as Interest Drawbacks (IDB) of up to 40 per cent that diligent borrowers could enjoy.
This came as NIRSAL and the Morocco bank of agriculture, Credit Agricole Du Maroc (CAM) have signed a Memorandum of Understanding (MoU) geared toward the promotion of inclusive growth and sustainable development of the agriculture sectors of both countries.
The partnership rekindles their six-year partnership, through the facilitation of finance and investment, trade and support systems across agricultural value chains with emphasis on smallholder farmers.
Abdulhameed, and the Chairman of the Management Board of Credit Agricole Du Maroc (CAM), Mr. Tariq Sijilmassi, both signed the agreement on behalf of their respective institutions, thereby committing to the mutual prospecting and implementation of agriculture-oriented projects that benefit both organisations and their host countries.
The agreement followed a state visit to Nigeria in 2016 by the King of Morocco, His Majesty, Mohammed VI, providing the backdrop for the initial pact between NIRSAL and CAM, forming part of 15 bilateral agreements signed by the King and President Muhammadu Buhari on behalf of their countries.
Six years later, NIRSAL and CAM met again, this time at the head office of the latter in Rabat, to review activities under the agreement and rekindle the partnership.
However, the latest meeting expanded the scope of their pact to include B2B relationships, capacity building, knowledge transfer, and digital agribusiness risk management solutions.
Among the short and medium-term undertakings outlined by the MoU, both parties will work towards presenting a common front to the managers of the Land Degradation Neutrality (LDN) Fund in a bid to attract global finance for sustainable agribusiness investments.
CAM’s deep experience in developing solutions for the financial integration of smallholder farmers in Africa would also benefit NIRSAL in opening up more pathways for critical finance to enter the agricultural primary production sub-sector in Nigeria.
Speaking at the ceremony, Abdulhameed, pointed out that NIRSAL’s areas of need included the development of financing products that suit the seasonality of agriculture and other farming contexts, emphasizing the difficulties smallholders experience in keeping to the terms of conventional bank financing products.
NIRSAL, 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.
CAM, however, is a more experienced institution from which, according to Abdulhameed, NIRSAL is eager to learn.
Established in 1961, CAM is a universal bank that finances all sectors, with agricultural expertise as a particular vocation. Within the framework of national investment programme, CAM works to enhance agricultural activities and stabilize rural populations by sustainably improving their standard of living.
Beyond its agricultural expertise, CAM is also involved in several other financing projects, particularly in rural areas, through its network of 543 branches across the Kingdom of Morocco.
With special abilities in the design and deployment of products and services that are tailored to customers’ needs, it has ingrained itself into the fabric of Moroccan life whilst holding equally sizeable portfolio abroad.
Consequently, through its 60-year existence, the bank has granted over $10 billion in loans, making a profit of $430 million.
The agreement between NIRSAL Plc and CAM draws further relevance and validation from the South-South Cooperation – the technical cooperation among developing countries in the Global South.
