The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) is engaging the Management Credit Committees of commercial banks to apprise them of promising investment-friendly developments in the agribusiness sector and opportunities for value chain actors.
In the course of the engagements, NIRSAL has made presentations on its agribusiness models, financing frameworks, tools, techniques, methodologies and partnerships in meetings 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.
“The context for these efforts is that for years, the agriculture sector has received less than three per cent of total bank lending, leaving it largely underdeveloped and its vast potentials for economic growth untapped,” NIRSAL said.
To address this, the Central Bank of Nigeria (CBN) created NIRSAL to collaborate with all public and private sector stakeholders to fix broken value chains and de-risk the sector for increased inflow of finance and investments.
Its meeting with banks is to pitch its Agricultural Finance Risk Management innovations and agribusiness models that recognises banks’ desire to finance/invest but only in secure, risk-controlled, and structured environments.
In his presentations, NIRSAL’s MD/CEO, Mr. Aliyu Abdulhameed focused on the Upstream Segment (primary production) which it called “the Black-hole” because of the high risks involved and banks’ consequent aversion to it. Moreover, the upstream segment is where produce comes from and, consequently, other segments are dependent on it.
Mr. Abdulhameed told the banks about NIRSAL’s acquisition and utilisation of geospatial technologies for identification of the most ecologically endowed areas for specific commodities, combined with geo-spatial mapping and aggregation of arable lands.
He also introduced NIRSAL’s plan to acquire satellite imaging capabilities supported by Unmanned Aerial System (UAS) platforms as the most efficient technological platform for GIS mapping of large swathes of farmlands, remote sensing of crop health and as an early warning system for risk events in the field.
In all the interactions, NIRSAL received strong indications that banks are interested in “buying” its de-risked and structured Geo-Cooperatives. In the five months of these engagements with banks, NIRSAL catalysed Credit Risk Guarantees of over N14.5billion and generated pipeline deals of over N48billion, which today are at various stages of approval.
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