The Head, Nigerian Incentive-based Risk Sharing System for Agricultural Loans Project Implementation Office, Development Finance Department, Central Bank of Nigeria, Mr. Jude Uzonwanne, has urged farmers to avail themselves of NIRSAL’s N500bn lending guaranteeing capacity to improve national food security and their individual businesses.
He spoke during an international summit, titled, ‘Financing agriculture in Nigeria,’ organised by the Kwara State Government, Vanguard Media Limited and Courtly Communications Limited in Ilorin.
Uzonwanne said NISRAL was giving loan rebate as reward for farmers who repaid their loans promptly.
He said, “NISRAL is not a lender but act as provider of guarantees to banks. We have a balance sheet that allows us to guarantee upto N500bn in lending. The bank is now more willing to lend to farmers because we know that we can guarantee that lending.
“Farmers should take advantage of this opportunity, and when they do pay back in time, we also have an incentive for them; which is that we give them an interest rebate.
“If a farmers takes a loan and pays back on schedule, on average, we give him back about 40 per cent of what he paid as interest as reward for not defaulting on the loan.”
He said insufficient financing was militating against the actualisation of increased food production, which is one of the targets of the transformation agenda of the Federal Government.
He added that NIRSAL would work with farmers, companies, state governments and all stakeholders in the agriculture business to help improve access to finance.
Uzonwanne, however, said financing was not the only problem militating against food security, but that better seeds and more mechanisation were needed.
He added that there was the need for the country to have new generation of young farmers, while it was also needful to help make farming become more profitable.
He said the Federal Ministry of Agriculture had a programme called the Growth Enhancement Support Scheme that was designed to help bring in fertiliser, seeds and other inputs at subsidised rates to farmers.
The inputs, according to him, will be distributed through agro-dealers and distributors.
He said, “We are working with the Federal Ministry of Agriculture to make sure that banks actually finance the agro dealers. Unlike in the past when the Federal Government will go out and buy about N80bn worth of fertilisers for distribution to states, it will not be done any more.
“It was not done last year and this is the second year. Now, the agro dealers can borrow directly from the banks and take those proceeds and buy fertiliser from companies and distribute the fertilisers.
“So, what we have done is to help create the financing agreement between banks and agro dealers. We just finalised those negotiations and we hope to have the agreement signed within a week, and that way, we can finance the entire fertiliser requirement of the country without the Federal Government spending one kobo.”
The Kwara State Governor, Alhaji Abdulfatah Ahmed, said the state government would continue to promote agriculture through public-private partnership for better economic prosperity of the state and Nigeria.