The Nigeria Incentive Based Risk Sharing for Agricultural Lending (NIRSAL) has announced a partnership with Katsina State Government to expand agricultural mechanization financing program and boost food production in the country.
Under the terms of the partnership, NIRSAL is to provide 75 percent bank guarantee for N1.6billion to be provided by Access Bank for the purchase of 225 tractors for lease to farmers at affordable rates.
The mechanization project is expected to increase the tractor density in Katsina state by 1,000 addition tractors in the nearest future.
The target is to boost mechanized farming, lower per hectare cost of land preparation and increase food production as well as incomes for smallholder and medium to large scale agricultural farmers in the state.
NIRSAL, an innovative mechanism of the federal government is targeted at de-risking lending to the agricultural sector, is designed to provide the singular transformational and one bullet solution to break the seeming jinx in Nigeria’s agricultural lending and development.
It is an initiative of the Central Bank of Nigeria (CBN), the Bankers Committee and the Federal Ministry of Agriculture and functions to essentially administer a Risk Sharing Fund designed to identify, redefine, measure, re-price and evolve strategies to de-risk and catalyze lending to the Nigerian agriculture value chain.
It was subsequently incorporated as a Public Limited Liability Company (PLC) and licensed as a Non-Bank Financial Institution (NBFI) with the primary mandate of facilitating the flow of credit to agribusiness value chain players and collaborating with stakeholders to fix broken agricultural value chains in Nigeria.
Its goal really is to trigger an agricultural industrialization process through increased production and processing of the greater part of what is produced to boost economic earnings across the value chain.
NIRSAL said the pact with Katsina state is therefore a continuation of its mandate to boost agricultural production, stimulate inclusive growth and stimulate job creation in the sector.
Other key signatories to the partnership include Mahindra Tractor Manufacturing Company, an international farm equipment manufacture from India; Tractors Owners and Operators Association of Nigeria (TOOAN; Springfield Agro, a trail blazer in the field of agro input distribution; and Access Bank a leading commercial bank in Nigeria.
At the launch, the Managing Director of NIRSAL, Aliyu Abbati Abdulhameed said the project is another proof of the deployment of NIRSAL’s strategic mechanization finance framework which is designed to facilitate financing for the purchase of expensive farming equipment for lease to farmers at affordable rates so as to deepen commercial agriculture.
According to him, the project is in line with the Buhari government’s policy focus to put agriculture in the driving seat of the Nigerian economy”
He commended the Katsina State Government for providing the policy support, TOAN for organizing themselves as a professional body and Access Bank for their willingness to provide the financing.
He reiterated NIRSAL’s commitment to deliver its mandate by boosting agricultural productivity and helping government achieve its objective of self-sufficiency in food production, job creation and economic diversification by increasing commercial bank lending to the sector.
Aminu Masari, Katsina State governor who also spoke at the event said the mechanization scheme is part of the state’s policy to boost agricultural mechanization.
“This project represents a key milestone in our government’s plan to increase mechanized farming in Katsina by at least 50%. Our goal is for a start to provide at least one tractor for each of the 361 wards in the state. We are starting with 225 for now, but this will be scaled up pretty soon,” Masari who was represented by the Deputy Governor, Mannir Yakubu said.
He commended NIRSAL for its strategic financing role for the take-off of the project and reducing the burden on the state’s finances. He also expressed appreciation to all key stakeholders for being part of the scheme.
Other key dignitaries at the event included Elesa Bitrus, National President of TOAN, Ashok Thakur, Vice President and Head of Operations – Africa Business, Mahindra and the Managing Director Springfield Agro Limited, Tarun Das.