The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has signed a Memorandum of Understanding (MoU) with Credit Agricole Du Maroc (CAM), Morocco, toward the promotion of sustainable agriculture of both countries.
The Head, Corporate Communication, NIRSAL PLC, Anne Ihugba, said this in a statement on Friday, in Abuja.
Ihugba said this would be through the facilitation of finance and investment, trade and support systems across agricultural value chains with emphasis on smallholder farmers.
She said the Managing Director/CEO of NIRSAL Plc, Mr Aliyu Abdulhameed and Mr Tariq Sijilmassi, the Chairman of the Management Board of Credit Agricole Du Maroc (CAM), signed the MoU on behalf of their institutions.
She said that by this MoU, they were committed to the mutual prospecting and implementation of agriculture-oriented projects that benefit both organisations and their host countries.
Speaking at the event, Abdulhameed elaborated on NIRSAL Plc’s areas of need to include the development of financing products that suited the seasonality of agriculture and other farming contexts, and the difficulties smallholders experience in keeping to the terms of conventional bank financing products.
Abdulhameed expressed confidence that innovative financing products that speak to the peculiarities of agricultural primary production would be of immense benefit to the agriculture financiers.
He said that it would help financiers to maximise the benefits and incentives in the 75 per cent Credit Risk Guarantee (CRG) issued by NIRSAL Plc for primary production projects.
According to him, it will also help diligent borrower to enjoy Interest Drawbacks (IDB) of up to 40 per cent.
He said that leveraging NIRSAL’s CRG facility commercial lenders in Nigeria have injected over N152.8 billion into the agriculture sector in the last six years, with credit crystallization rate still below one per cent NIRSAL Plc.
“A pacesetter in the modern, innovative use of blended finance to spur the growth of agriculture, has been a reference point for emerging Development Finance Institutions (DFIs) across Sub-Saharan Africa,” he said.
According to Abdulhameed, CAM is a more experienced institution from which NIRSAL Plc is eager to learn.
Established in 1961, CAM is a universal bank that ‘finances all sectors, with agricultural expertise as a particular vocation within the framework of national investment programs.
CAM works to enhance agricultural activities and stabilise rural populations by sustainably improving their standard of living beyond its agricultural expertise.
It is also involved in several other financing projects, particularly in rural areas, through its network of 543 branches across the Kingdom of Morocco.
(NAN)
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