NIRSAL, Moroccan bank sign pact to boost agric development

BY ONOME AMUGE

The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), has signed a memorandum of understanding (MoU) with Credit Agricole Du Maroc (CAM), a Moroccan agricultural finance bank, to foster facilitation of finance and investment, strengthen trade and support systems, and promote sustainable development across agricultural value chains of both countries, with emphasis on smallholder farmers.

Aliyu Abdulhameed, managing director of NIRSAL Plc, and Tariq Sijilmassi, chairman of the management board of CAM, signed the agreement on behalf of their institutions following a meeting at the CAM head office in Rabat, Morocco’s capital city.

The development is in furtherance of a six-year initial pact, which forms part of 15 bilateral agreements between NIRSAL Plc and CAM, signed by Mohammed VI, the King of Morocco and President Muhammadu Buhari during the former’s visit to Nigeria in 2016.

Among the short and medium-term undertakings outlined by the MoU, both parties agreed to work towards presenting a common front to the managers of the land degradation neutrality (LDN) fund in a bid to attract global finance for sustainable agribusiness investments.

The MoU further expanded the scope of their pact to include B2B relationships, capacity building, knowledge transfer, and digital agribusiness risk management solutions.

Speaking at the MOU signing event, Abdulhameed noted that commercial lenders in Nigeria have in the last six years, injected over N152.8 billion into the agriculture sector leveraging NIRSAL’s credit risk guarantee (CRG) facility, with credit crystallisation rate still below one percent.

On the difficulties smallholders experience in keeping to the terms of conventional bank financing products, Abdulhameed emphasised that NIRSAL’s areas of need include the development of financing products that suit the seasonality of agriculture and other farming contexts.

The NIRSAL managing director expressed confidence that innovative financing products that speak to the peculiarities of agricultural primary production would help agriculture financiers to maximise the benefits and incentives in the 75 percent Credit Risk Guarantee (CRG) issued by NIRSAL Plc for primary production projects, as well as Interest Drawbacks (IDB) of up to 40 percent that diligent borrowers can enjoy.

He asserted that CAM’s deep experience in developing solutions for the financial integration of smallholder farmers in Africa would benefit NIRSAL in creating more pathways for critical finance to enter the agricultural primary production sub-sector in Nigeria.

Sijilmassi, in response, pledged commitment to the mutual prospect and implementation of agriculture-oriented projects that are beneficial to both organisations and their host countries.