Union Bank, NIRSAL sign N10bn MoU to fund agriculture

Union Bank of Nigeria and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) have launched a N10 billion agriculture finance scheme to provide funds for the agricultural sector.

The Managing Director of NIRSAL, Aliyu Abdulhameed and his counterpart Emeka Emuwa of Union Bank signed the Memorandum of Understanding (MoU) in Abuja.

Under the terms of the partnership, Union Bank has set aside N10 billion to lend specifically to viable and bankable agricultural projects that are promoted by NIRSAL.

The categories of the qualifying agricultural projects that would benefit include primary production, agro processing, mechanization, inputs supply, logistics/haulage, storage and post-harvest handling, and preselected value chains.

NIRSAL on its part will provide credit risk guarantees for the loans provided by Union Bank on the back of its $300 million risk-sharing facility.

The credit risk guarantees will range between 30-75% of the loan value, depending on the dynamics of the project in the agricultural value chain

NIRSAL’s Abdulhameed said the launch of the scheme marks yet another major step by NIRSAL to increase commercial bank lending to agriculture.

He explained that about two months ago, NIRSAL signed a N10 billion agribusiness finance MoU with Stanbic IBTC that could be expanded to about N50 billion.

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