The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending has entered into a N50bn agriculture financing partnership with Stanbic IBTC Bank for the 2017 and 2018 dry and wet seasons.

A Memorandum of Understanding was signed in Abuja by the Managing Director, NIRSAL, Aliyu Abdulhameed, and his Stanbic IBTC Bank counterpart, Dr. Ademola Shogunle.

Under the terms of the partnership, NIRSAL is to provide credit guarantees to cover up to 75 per cent of Stanbic IBTC loans to bankable agricultural projects, using its $300m risk sharing facility, according to a statement by the two firms.

Speaking on the partnership, which is expected to boost agricultural productivity in the country, Abdulhameed said it would support projects in livestock, crops, mechanisation, logistics and poultry.

He explained that the first phase of the scheme was projected to create over 92,000 direct jobs, impact about 200,000 lives, boost incomes of rural farmers and complement the government’s efforts to drive inclusive economic growth through agriculture.

“It will also lead to the cultivation of additional 11,195 hectares of arable land; increase the national food output by up to 50,580 metric tonnes; and provide N3.87bn value addition,” the NIRSAL boss stated.

He stressed that the partnership was in line with NIRSAL’s mandate to attract private sector finance to agriculture.

He added that NIRSAL, as a policy tool of the Central Bank of Nigeria, was collaborating with financial institutions such as Stanbic IBTC Bank to drive growth in the agriculture sector as part of its institutional contribution to achieving the objectives of the Economic Recovery  and Growth Plan of the President Muhammadu Buhari administration.

Abdulhameed said, “This partnership marks the start of NIRSAL’s long-term collaboration with Stanbic IBTC to ensure that commercial agriculture is entrenched and made a mainstream occupation.

“We are committed to providing Stanbic IBTC with the cover to lend to agriculture and are happy that its management has agreed to partner us on this project.”

Shogunle, in his remarks, said Stanbic IBTC Bank had committed an initial N10bn for the take-off of the scheme, an amount that would be expanded gradually.

He said that the bank regarded NIRSAL as a natural partner, stressing that the financing scheme was the beginning of the diversification of the country’s revenue base.

The banker added that the N10bn initial financing had the capacity to impact 500,000 lives, noting that over time, the scheme would attract more funds and expertise to the benefit of the country.

“The Nigerian economy is diversified; what is not diversified is the source of government revenue, which is concentrated in oil and gas; This N50bn agric finance scheme is the beginning of the diversification of the revenue base of the country,” he stated.