The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), on Friday, secured an additional funding of 5 billion naira from Standard Bank Group and Standard IBTC Bank to the agriculture sector.
The partnership fund, was mobilised from Stanbic IBTC after an extensive presentation on NIRSAL’s agribusiness models, financing and marketing at a meeting in Lagos on Friday.
The presentation, exclusively gathered by AgroNigeria, was made by the NIRSAL Managing director, Mr Aliyu Abdulhameed to officials of Standard Chartered Bank and officials of a reputable insurance company present at the meeting.
The purpose of the meeting was to inform the management of the bank of promising investment-friendly developments in Nigeria’s emerging agriculture/agribusiness sector and the expanding opportunities for value chain actors, with the aim of unlocking banks’ balance sheets to agribusiness lending.
The NIRSAL boss revealed that the meeting with Standard Chartered Bank was premised on the discovery that over the years, the agriculture sector had received less than 3% of total bank lending, leaving it largely underdeveloped and its vast potential for economic growth untapped.
This, according to him, was why the Central Bank of Nigeria created NIRSAL to collaborate with all public and private sector stakeholders to fix broken agricultural commodity value chains and de-risk the sector to enable increased inflow of finance and investments.
“So far, the NIRSAL risk-led agricultural financing approach is adjudged to be in high resonance with banks risk/return imperatives. The prior perception of high risk by banks is gradually giving way to a new-found faith in the new business opportunities the sector has to offer.”
Standard IBTC Bank Chief Executive Officer, Dr. Demola Sogunle made it known at the meeting that Standard Bank Group remains the largest FX commodity provider in Nigeria asides the CBN and it has seamless relationship with its customers in the largest economy in Africa, that is, South Africa and with customers in the country with the largest economy in the world, China.
“Stanbic IBTC Bank’s commitments to NIRSAL in this partnership for agribusiness development in Nigeria is and would remain seamless and this drive is basically backed by the top echelon of Stanbic IBTC both in Nigeria and South Africa. We have opened over 3,000 accounts for farmers in Nigeria and we have bought into the Anchor Borrowers Programme of the FG,” he added.
He commended the initiative behind the establishment of NIRSAL and appreciated the NIRSAL management for the confidence reposed in the bank and the cooperation so far in the last two years.
NIRSAL MD, Mr Addulhameed, in another swift reaction, said unequivocally that it was a revelation to know that Stanbic IBTC have a seamless relationship with its customers in notable economies in Africa and the world. He said such optimal efficiency is part of the NIRSAL’s watchword.
“Critical control of the risk and procedural engagements in this partnership is key. Personnels of both NIRSAL and Stanbic IBTC would continue to robustly engage in consultations in ways to ensure a less complex process in the operations of this partnership,” he said.
He also added, “As a 3 year old baby, NIRSAL has grown up massively but there is an hunger to map out a new level of seamless operations with Stanbic IBTC Bank in the agrultural value chain and exploring the diverse prospects of agribusiness in Nigeria is now an exclusive responsibility of NIRSAL. The FG is no longer excited about the petroleum or telecommunication sectors. What excite the FG presently are the numerous potentials emanating from agribusiness. Nigeria has 84 million hectares of arable land embedded with water, labour and market potentials.”
He said going forward, the enhanced understanding of NIRSAL’s role in securing a safe, profitable and a globally competitive agribusiness economy was expected to elicit greater portfolio commitments from Nigerian banks. This would facilitate a greater flow of business, financing and marketing to systemic, agriculture-related investment opportunities in Nigeria.