CBN approves N75billion loan for agricultural lending in states, Abuja
The loan guarantee scheme is a public-private sector initiative set up to transform the country’s agricultural sector. It was initiated by the apex bank, the Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development, to guarantee 75 per cent loans provided by Deposit Money Banks (DPB) to farmers as part of efforts to transform the country’s agricultural sector.
The Head of NIRSAL Project Implementation Office under the Development Finance Department of the CBN, Jude Uzonwanne, who spoke on the role of NIRSAL in Abuja, told the Minister of State for the Federal Capital Territory, Oloye Akinjide, that the guarantee would be issued to farmers through commercial banks and other financial institutions.
“NIRSAL is a flexible financing tool designed to change the behaviour of financial institutions.
“It covers all crops and livestock activities in Nigeria, while driving improved investment outcomes and job creation. It is also building on a legacy of previous CBN interventions in agriculture that has helped create thousands of jobs.”
Mr. Uzonwanne said the programme was designed to create access to finance to farmers by integrating end-to-end agriculture value chains, such as input producers, farmers, agro dealers, agro processors and industrial manufacturers with agricultural financing value chains – loan product development, credit distribution, loan origination, managing and pricing for risk, and loan disbursement.
“The integration is driven by NIRSAL’s 5 pillars, particularly the Risk Sharing Pillar and the Technical Assistance pillars, such as Risk sharing Facility, allocated ?45 billion, Insurance Facility (?4.5 billion), Technical assistance facility (?9 billion), Agricultural bank rating scheme (?1.5 billion), and Bank incentive mechanism (?15 billion).
The Minister of State for FCT, who was represented by the Director of Treasury in the FCT Administration, Ibrahim Bomai, said that NIRSAL is cardinal to the success of the Federal Government’s Agricultural Transformational Agenda (ATA) as it was established to address the grey areas inhibiting agricultural growth in the country.
“NIRSAL seeks to address all the technical, administrative and financial needs of the farmers along the selected agricultural value chain commodities in which the country has comparative advantage,” said the minister said Akinjide.
He said the six Area Councils of the FCT have already been directed to identify and key into the value chain commodities to be promoted in their respective area of jurisdiction, adding that the Authority has commenced the implementation of the Growth Enhancement Scheme of Federal Ministry of Agriculture & Rural Development in order to empower the farmers in the territory.