• Thursday, December 07, 2023
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BusinessDay

CBN guarantees N97.6m credit to Kaduna farmers

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 537 farmers from Kaduna State have benefited from N97.6 million credit facilities from the state’s branch of the Central Bank of Nigeria (CBN).

This is a decline from the number and value of the credits to farmers from the state in the previous year. In 2011, 723 applications worth N295.07 million were guaranteed and disbursed to farmers.

The branch controller of CBN in Kaduna, Mohammed Gusau, disclosed this weekend during the 2012 bankers award night in the state.

The facilities consolidate the partnership between the CBN and Kaduna State government in the area of agricultural financing and are expected to boost agriculture, reduce poverty and generate employment.

“During the period under review, the Kaduna branch of the Central Bank of Nigeria (CBN) guaranteed 537 loans worth N97.6 million disbursed to farmers throughout the state by the participating deposit money banks (DMB).

“When compared with the previous year, this shows that in the year under review, the number and value of loans guaranteed decreased by 25.7 percent and 66.9 percent, respectively”.

Gusau told the gathering that the partnership with the state government focused on tomato and ginger processing, and silos expansion programme under the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL).

He described the programme as a dynamic and holistic approach to tackle both the agricultural value chain and the agricultural financing value chain.

Gusau added that NIRSAL is a demand driven credit facility rather than the current supply driven funding which will adopt a value chain approach to lending and gives banks freedom to choose which part of the chain they would be interested in lending.

The branch controller noted that the programme was expected to build the capacity of banks to engage and deliver loans, reduce counterpart risks facing banks through innovative crop insurance products, reward performance in agricultural lending and would be managed with performance based incentives.

“NIRSAL commenced formal activities in April 2012. It is worth mentioning today that over N6 billion agro-business funding has been guaranteed by NIRSAL, while N20 to N30 billion more are already in the pipeline. NIRSAL has an engagement model for the state government compliance to stress its commitment to providing the required supporting infrastructure, policies and incentives”, he said

BLESSING OLAIFA, Kaduna