Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and a Moroccan bank of agriculture, Credit Agricole Du Maroc (CAM) have signed a memorandum of understanding (MOU) to promote inclusive growth and sustainable development.
The agreement which has rekindled their six-year partnership
would facilitate finance and investment, trade and support systems across
agricultural value chains, with emphasis on smallholder farmers, NIRSAL said in
a statement on Friday.
Aliyu Abdulhameed, managing director/CEO of NIRSAL, and
MTariq Sijilmassi, chairman, management board of Credit Agricole Du Maroc
(CAM), signed the MOU, committing to the mutual prospecting and implementation
of agriculture-oriented projects that benefit both organisations and their countries.
A state visit to Nigeria in 2016 by the King of Morocco,
Mohammed VI, was the backdrop for the initial pact between NIRSAL and CAM,
forming part of 15 bilateral agreements signed by the King and President
Muhammadu Buhari on behalf of their countries.
Six years later, NIRSAL and CAM met again, this time at the
head office of the latter in Rabat, to review activities under the agreement
and rekindle the partnership. The latest meeting expanded the scope of their
pact to include B2B relationships, capacity building, knowledge transfer, and
digital agribusiness risk management solutions.
Among the short and medium-term undertakings outlined by the
agreement, is that NIRSAL and CAM will 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 statement
said.
It added that “CAM’s deep experience in developing solutions
for the financial integration of smallholder farmers in Africa would also
benefit NIRSAL in opening up more pathways for critical finance to enter the
agricultural primary production sub-sector in Nigeria.”
At the MOU signing event, Abdulhameed highlighted NIRSAL’s
areas of need to include the development of financing products that suit the
seasonality of agriculture and other farming contexts, emphasising the
difficulties smallholders experience in keeping to the terms of conventional
bank financing products.
Abdulhameed 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 for primary
production projects, as well as Interest Drawbacks (IDB) of up to 40 percent
that diligent borrowers can enjoy.
Leveraging NIRSAL’s CRG facility, commercial lenders in Nigeria have injected over N152.8 billion into the agriculture sector in the last six years, with credit crystallisation rate still below 1 percent, he stated.