The Central Bank of Nigeria (CBN) has approved the disbursement of about N75billion as loan to farmers in the 36 states and the Federal Capital Territory (FCT) under the Nigerian Incentive-Based Risk Sharing in Agricultural Lending (NIRSAL).
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 would mobilize financing for Nigerian agribusiness by using credit guarantees to address the risk of default,” Mr. Uzonwanne said.
“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).
“NIRSAL will share risks with banks ranging from 30% to 75% of loss depending on the segment. We are prepared to offer following terms to farmers in the States and FCT Abuja: 75% guarantees on all input, working capital and limited living cost loans to plant the crop, and loan duration should be about 24 – 28 months,” he said.
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.
The United Bank of Africa (UBA) has been saddled with the responsibility of registering interested applicants for the loan.
What is this product about?
The Product is designed to offer credit facilities to farmers under the Agriculture Loan Scheme initiative of the Federal Government of Nigeria.
Who are the target markets?
Individuals in Paid Employment, Micro, Small farmers, Medium and Large scale farmers, Corporate Organisations, NGOs, Govt and its agencies engaged in Crop production/cultivation, Poultry, Fishery, Animal Husbandry, Plantation Agriculture, Agro processing, farm machinery and hire services..
Product Coverage
- Agro Processing
- Out-Growers Scheme
- Livestock Farming
- Cultivation of Arable crops
- Storage facilities and maintenance
- Tractorisation and Mechanisation Schemes
- Plantation Agriculture, including tree crops replacement scheme
What are the Benefits?
- Increased food production and national security
- Poverty Reduction
- Employment generation and Wealth creation
- Empowerment of farmers and rural households through credits and savings
- Strengthen the governance structure of co-operatives
- Contribute to National Economic growth.
- Industrial development.
What are the Requirements?
- Must be practicing farmer or agro-allied entrepreneur.
- Must have been in account relationship with UBA for minimum of 3 months.
- Members must be between the ages of 18 and 60years
- Must be a member of All Farmers Association of Nigeria(AFAN) and recommended by the same the same association
- Viable proposal.
- Positive CRMS report.
Who can apply?
Individuals in Paid Employment, Micro, Small farmers, Medium and Large scale farmers, NGOs, Govt and its agencies, Corporate Organizations
How are customer's applications going to be treated?
Visit the nearest UBA Business office on or before March 31st 2016 to get the application form for free and apply. But the following details are gotten from UBA, some other Nigerian banks are also giving out Agric loans, please do well to contact your bank to know about the CBN loan if you don't use UBA and interested.
