- NIRSAL’s Commodity Initiative Gets N70bn Boost from Ecobank
The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending has signed a memorandum of understanding with Ecobank on N70bn portfolio commitment to agribusiness projects initiated by NIRSAL.
The facility will be drawn down in series, with the pact effectively kicking off with an initial N15bn agribusiness financing provision by Ecobank.
The commitment by Ecobank is the latest of NIRSAL’s focus on breaking the jinx of poor investment in agribusiness by the financial sector where banks are provided with strong incentives such as risk-sharing, technical assistance and innovative insurance.
A statement from NIRSAL on Thursday said the attraction for Ecobank, and indeed other commercial banks that have recently made portfolio commitments to NIRSAL-supported agribusiness projects are anchored on NIRSAL’s mapping-to-markets strategy.
The strategy was conceived to de-risk and make operations in commodity value chains more efficient through optimised primary production in a closed financing loop.
The Managing Director, NIRSAL, Aliyu Abdulhameed, said that Ecobank’s support demonstrates the growing acceptance of the Central Bank of Nigeria’s proposition of NIRSAL as an innovative mechanism targeted at providing a safe climate for highly profitable private sector investments.
Abdulhameed said, “This MoU signing marks the beginning of collaboration between NIRSAL and Ecobank on NIRSAL’s agribusiness initiatives and the development of products that will support lending to actors in the agricultural value chain in conformity with Ecobank’s risk acceptance criteria and credit process.
“With Ecobank’s commitment of N70bn portfolio to NIRSAL’s agribusiness initiatives, the bank and NIRSAL will jointly select and develop projects that meet the financing needs of actors in NIRSAL’s focal commodity value chains.”
The statement also quoted the Managing Director of Ecobank, Patrick Akinwuntan, as saying the bank was actively promoting agriculture as a strategic initiative to support national development.
Akinwuntan said Ecobank was committed to working with NIRSAL to open up the vast opportunities that abound in agriculture and to ensure citizens benefit ultimately.
He said, “The Federal Government had made it clear that investing in the agriculture sector is very critical for Nigeria to succeed, especially taking into consideration the natural endowment God granted us in terms of population, land and weather.
“We have the opportunity to make agriculture the economic spinner for Nigeria. What we are doing is to fulfil this policy direction of the Federal Government and the Central Bank of Nigeria.”