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NIRSAL, Moroccan bank seal deal to promote agriculture

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.

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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.

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