The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has signed a Memorandum of Understanding (MOU) with Ecobank on a N70billion portfolio commitment from the bank to Agribusiness projects initiated and de-risked by NIRSAL.
The facility will be drawn down in series, with the MOU effectively kicking off an initial N15bn agribusiness financing provision by Ecobank, a statement said yesterday.
Announcing the partnership in Lagos after a business meeting with the management of Ecobank, Aliyu Abdulhameed, Managing Director/CEO, NIRSAL Plc, said that Ecobank’s onboarding demonstrates the growing acceptance of the Central Bank of Nigeria’s proposition of NIRSAL as an innovative mechanism targeted at de-risking lending to the agricultural sector and providing a safe climate for highly profitable private sector investments.
Abdulhameed stated that “this MOU Signing marks the beginning of a collaboration between NIRSAL and Ecobank on NIRSAL’s agri-business 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 a N70Billion portfolio to NIRSAL’s agribusiness initiatives, the bank and NIRSAL would jointly select and develop projects that will meet the financing needs of actors in NIRSAL’s focal commodity value chains”.
Under this agreement, and in line with its Mapping to Markets (M2M) strategy, NIRSAL will identify and refer structured projects to Ecobank to support the Bank’s deal origination and financing operations in agribusiness. On its part, Ecobank will finance the projects leveraging NIRSAL’s Credit Risk Guarantee (CRG) which is a further comfort for lenders to agriculture and agribusiness.
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