NIRSAL to disburse N60b loans to farmers, another $300m facility on youths from AfDB
Federal Government is currently speeding up quick access to funding to farmers and youths as part of new moves to drive economy diversification.
The facility expansion scheme is to effect access to loans to over 3.8 million farmers by between this year and 2026.
Accordingly, the Nigerian Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), in line with the plans is to facilitate about N60bn in fresh commercial bank lending to farmers in the current financial year.
The federal agency also added that it will execute the $300 million African Development Bank, AfDB’s Youth Enable Programme, and operationalising the $500 million Mechanisation Partnership with the Brazilian Government and a host of others.
NIRSAL noted that the moves are geared toward enhancing access to credit by farmers as well as making agribusiness more attractive to the youths to curtail the high rate of rural-urban migration.
Explaining more, while delivering a paper titled: “Powering Nigerian Agriculture Through Innovative Financing: in Lagos, the Managing Director of NIRSAL, Aliyu Abbati Abdulhameed said: “NIRSAL’s broad objective is to increase lending to 3.8 million farmers by 2026 through cooperatives and value chains”.
“NIRSAL also plans to reduce the break-even interest rate to agribusiness borrowers from 22 per cent to between 7.5 per cent and 10.5 per cent.”
On the Federal Government’s efforts in making agriculture one of the six priority sectors of focus in the Economic Recovery Growth Plan (ERGP), the NIRSAL boss said the decision is the right one because agriculture has unrivalled capacity in job creation, poverty reduction and inclusive economic growth.
According to him, the current economic context and the changing global economy demanded that Nigeria moved with greater urgency to fix agriculture.
He said the agency’s readiness to play its role, is a tribute to the farsighted vision of President Muhammadu Buhari, the leadership of Godwin Emefiele, the Governor of the Central Bank, and the active support of Chief Audu Ogbeh, the Minister of Agriculture and Rural Development.
Abdulhameed said NIRSAL is a key part of the government’s multi-pronged strategy to move agriculture beyond potential to significant progress, adding that its role is to help solve the longstanding problem of inadequate financing of the agricultural sector by leveraging its $500 million fund to incentivise lending to the sector.
He assured that NIRSAL will continue to play its role by ‘de-risking’ the agricultural financing value chain, building long-term capabilities and institutionalising agricultural lending through risk sharing with banks, technical capacity building as well as the provision of incentives to encourage bank lending.