NIRSAL accepts 50% credit risk for cocoa firm
The Nigeria Incentive -Based Risk Sharing System for Agricultural Lending, NIRSAL, is bearing a 50 percent credit risk guarantee for a cocoa processing company in Ondo state.
The provision worth N2billion working capital facility will enable the cocoa firm, Agro Traders Limited, to export 22,000 metric tonnes of cocoa.
Under the arrangement, the Nigerian Export -Import Bank and the United Bank for Africa will be financing the purchase, storage, processing and export of 22, 000 metric tons of cocoa beans.
A statement issued by the agency states the business between the four parties would also support thousands of smallholder cocoa farmers who supply agro traders with a guaranteed off take market for their produce every year.
While proposing similar collaborations with specific development finance institutions that have mutual objectives, NIRSAL is wooing all commercial banks to open up their balance sheets to agriculture.
The call was made with the assurance that the NIRSAL CRG would secure substantial part of bank loans to agriculture and that its comprehensive risk management framework would forestall defaults.
Speaking during a tour of Agro Traders factory in Akure, NIRSAL’s Managing Director / CEO, Mr Aliyu Abdulhameed , stated that NEXIM’s nine per cent interest rate, together with NIRSAL’s 50 percent guarantee, would present an even more attractive financing proposition for the cocoa beans processing company.
The statement quoted NIRSAL boss as saying that the move would help Agro- allied companies to grow their agribusinesses with NIRSAL’s support.
He said NIRSAL adopted a value chain fixing approach in facilitating finance and investments for agribusiness.
He said through its mapping - to-market strategy launched recently, NIRSAL was crowding actors from various value chains around the primary production of commodities.