Nigeria’s NISRAL commits US $40m to agricultural financing

Nigeria’s Nigeria Incentive-Based Risk Sharing System (NISRAL) has commited US $40m to agricultural financing. The Managing Director Mr. Aliyu Abdulhameed has disclosed that the amount had been used with additional financing from commercial banks’ balance sheets while leveraging NIRSAL’s Credit Risks Guarantees (CRGs) scheme and other de-risking mechanisms.

He added that efforts had reached various stages of approval for an additional US $133m from banks to boost agriculture financing. The commitments of the financial institutions were reportedly made possible through an ongoing engagement by NIRSAL with the management credit committees of commercial banks in continuation of its efforts to get more funds into agriculture by strengthening the According to Mr. Abdulahmeed, the purpose of the exercise was to notify NISRAL of promising investment-friendly developments in Nigeria’s emerging agribusiness sector and the expanding opportunities for value chain actors, with the aim of unlocking banks’ balance sheets to agribusiness lending.

NIRSAL’s meeting with banks was mainly to pitch its agricultural finance risk management innovations and agribusiness models that take cognizance of banks’ desire to invest but only in secure, risk-controlled and structured environments.

According to media reports, the agency had been in talks 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 of the maiden engagement while more banks and other financial institutions have reportedly expressed interest to be engaged in the subsequent phases over the coming weeks.

The MD stressed that the NIRSAL risk-led agricultural financing approach had so far been adjudged to be in high resonance with banks risk/return imperatives.

However, Abdulhameed, in his presentation titled: “Unfolding Opportunities in Agricultural Financing”, highlighted NIRSAL’s acquisition and planned utilization of geospatial technologies for identification of the most ecologically endowed areas for specific commodities, and for the aggregation of fragmented farmlands.

He said these technologies include the acquisition of Satellite Imaging data to be supported by Unmanned Aerial System (UAS) platforms adjudged to be the most efficient technological platform for monitoring large swathes of farmlands, remote sensing of crop health status and to serve as an early warning system to control risk events in the field.

He said the agency’s engagements with banks started with the successful NIRSAL-sponsored Bank Chief Risk Officers’ (CRO) Retreat held in Lagos in October 2018.

 


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Farmers Review Africa
Farmers Review Africa
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