NIGERIA – The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc has facilitated the approval and disbursement of N81.8 million (US$198,700) and N150 million (US$364,500) from Union Bank Plc and Sterling Bank Plc respectively to two agri firms to boost poultry and cocoa production and export in Cross River State, South of Nigeria.
NIRSAL Plc, is a non-bank financial Institution wholly-owned by the Central Bank of Nigeria (CBN), established in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD) and Nigerian Bankers’ Committee.
Its mandate is to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agriculture & agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalizing incentives for agricultural lending.
Under the recent deal, the funds represent 50 per cent Credit Risk Guarantee (CRG) and 20 per cent Interest Drawback (IDB) by NIRSAL on the respective loans of Gbagolo Integrated Farms Limited -a livestock producer and TOAJ Nigeria Limited – a cocoa dealer.
NIRSAL leveraged on its CRG, an instrument it utilizes to share agribusiness risks with financiers to make the capitals available to the two firms, a boost expected to generate significant gains for the local and national economies through poultry and cocoa production and export.
According to reports by This Day, Gbagolo Integrated Farms, will use its N81.8 million Term Loan to finance the purchase of 25,000 Point of lay birds, 25,000 capacity battery cages and feeding compliments.
Meanwhile TOAJ will channel its N150 million (US$364,500) Export/Trade Finance facility towards the sourcing and purchase of cocoa for export.
The injection of these finances into the poultry and cocoa value chains in Cross River State is set to create a positive knock-on effect for players along each segment of both value chains and the agribusinesses’ host communities at large.
Specifically, the purchase of 25,000 Point of Lay birds by Gbagolo Integrated Farms Limited is planned to impact poultry feeds sellers; and other inputs suppliers in the pre-upstream value chain segment.
It is also projected to impact producers/sellers of point of lay birds in the upstream segment, and consumers of eggs and spent layers in the downstream segment.
On the other hand, TOAJ Nigeria Limited’s facility is aimed at supporting thousands of farmers who supply its inventory by providing them with a secure, sustainable, and guaranteed offtake market.
Furthermore, the export of cocoa will increase Nigeria’s stake in the global cocoa market and boost the country’s foreign exchange earnings.
The Managing Director of NIRSAL, Mr. Aliyu Abdulhameed, said that both projects were testaments to the fact that the organisation in its bid to realize its vision of “transforming the economy, delivering inclusive growth and positively impacting the lives of Nigerians”, supports all sizes of businesses, whether small, medium or large across the length and breadth of the country.
Abdulhameed added that, as a guarantor, NIRSAL Plc’s intervention positively impacted both the lender and the borrower, as well as the overall economy, implying that the lender invests safely and earns competitive returns.
According to him, the borrower’s capacity utilization and productivity is increased, and the economy reaps the benefits of the backward integration occasioned by increased local production at the expense of importation of essential goods.
He urged all agricultural value chain stakeholders in the South-south region and the entire country to leverage NIRSAL’s CRG as the collateral required for getting commercial bank financing for their agribusinesses, no matter their size or location.