Ecobank, NIRSAL Signs MoU on Agric Financing; Assure Farmers of Single Digit Interest Rates

Ecobank Nigeria Limited and Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has signed a Memorandum of Understanding (MoU) signalling the beginning of a collaboration between both institutions on agri-business financing and the development of products that will support lending to actors in the agricultural value chain in conformity with Ecobank’s risk acceptance criteria and credit process.Patrick Akinwuntan, Managing Director, Ecobank Nigeria in a warm handshake with Aliyu Abdulhameed Managing Director/CEO, Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) after the signing of a Memorandum of Understanding (MoU) signaling the beginning of a collaboration between both institutions on agri-business financing

 

Under the arrangement, Ecobank has committed a portfolio of N70 billion in series that has the bank immediately releasing a lump sum of N15 billion take off funding. Ecobank and NIRSAL would jointly select and develop projects that will meet the financing needs of actors in NIRSAL’s focal commodity value chains. These include maize, soybean, wheat, cassava and cotton for industrial commodities. The list also includes consumer commodities such as hibiscus, sesame, ginger and shea, rice; controlled environment agriculture commodities including sweet potato and beans, fresh fruits and vegetables and agriculture and integrated livestock commodity. The intent of the partnership is to ensure farmers get single digit interest rates to make agriculture attractive to both the elderly and the young population.

 

In his comment at the MoU signing ceremony in Lagos, Patrick Akinwuntan, Managing Director, Ecobank Nigeria Limited said the bank is actively promoting agriculture as a strategic initiative to support national development which is critical to the wellbeing of Nigerians. According to Mr Akinwuntan, Ecobank is committed to working with NIRSAL to open up the vast opportunities that abound in agriculture and to ensure citizens benefit ultimately.

 

“This is a collaboration. The Federal Government had made it clear that investing in the agriculture sector is very critical for Nigeria to succeed, especially taking into consideration the natural endowment God granted us in terms of population, land and weather. We have the opportunity to make agriculture the economic spinner for Nigeria. What we are doing is to fulfil this policy direction of the Federal Government and the Central Bank of Nigeria (CBN)” he noted.

Further, Mr Akinwuntan reiterated that “in Nigeria, Ecobank hopes to contribute positively to move the economy forward, creating employment for the teeming population through agriculture. We found a natural partner in Nirsal, as they have the requisite intellectual and technical capacity to act as meeting point for the stakeholders in the sector.  The de-risking participation of NIRSAL gives us the will to provide these facilities at single digit rates at a maximum of 9% to ensure that the users are able to make profit. When our customers make profit, we are also able to make profit. So it is a win – win business for everyone”.

 

Also speaking, the Managing Director of NIRSAL, Mr. Aliyu Abdulhameed revealed that under the agreement, and in line with its Mapping to Markets (M2M) strategy, NIRSAL will identify and refer structured projects to Ecobank to support the Bank’s deal origination and financing operations in agribusiness. On its part, Ecobank will finance the projects leveraging NIRSAL’s Credit Risk Guarantee (CRG) which is a further comfort for lenders to agriculture and agribusiness.

 

Shedding more light on the M2M, Abdulhameed noted that the strategy is “a closed loop financing system that mandatorily operates via one bank or a consortium of banks. He added that NIRSAL will refer input and service providers under the M2M to Ecobank for account opening, hence, driving the growth of the bank’s business.

 

In addition to growing the bank’s business, Abdulhameed said that NIRSAL will develop a program for training Ecobank staff on Agribusiness Finance, with emphasis on how to channel customer applications and requests for effective and streamlined agribusiness lending.

 

The MoU ceremony had in attendance top executives of both institutions including Akintayo Dada, Executive Director, Corporate & Investment Banking, Biyi Olagbami, Executive Director / Chief Risk Officer and  Carol Oyedeji, Executive Director, Commercial Bank, all of  Ecobank Nigeria and  Babajide Arowosafe, Executive Director, Technical, Eze Nwakanma, Assistant General Manager, Agricultural Value Chain Finance & Investment Services,  Ernest Ihedigbo, Head, Balance Sheet Financing & Portfolio Management and  Michael Adeoye, Head, Credit Risk Guarantee Operations and Portfolio Management, from NIRSAL Plc

 

About Ecobank Nigeria Limited

Incorporated as a public limited liability company on October 7, 1986, Ecobank Nigeria Ltd is a subsidiary of Africa’s leading independent banking group, Ecobank Transnational Incorporated (ETI). The Group employs 15,930 people in 40 different countries in over 940 branches and offices. Ecobank is a full-service bank providing wholesale, retail, investment and transaction banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.

 

With a larger African footprint than any other bank in the world operating in West, Central, East and Southern Africa, Ecobank is the only bank that spans 36 African countries yet operates a truly integrated African network. That is One unified integrated Ecobank Mobile Banking App, that works seamlessly across all 33 operating countries in Africa; One Ecobank Omni and Omnilite serving all Multinationals and SMEs in Africa; One Rapidtransfer app that breaks down country borders and allows the diaspora community send money directly to their loved ones, instantly and affordably across Africa; One Ecobank Online Banking platform that you can access easily whether you are in Abuja or Kinshasha.

 

Ecobank’s unique and largest pan-African platform is designed to help unlock the opportunities of the continent, for the continent, through standardization, fuelling regional integration, and trade and investment across borders.

 

Due to Ecobank’s sterling performance, it has been severally recognized; Most recently as ‘Best Retail Bank in Africa 2019’ at African Banker Awards; Most Admired Financial Services Brand in Africa 2019 by Brand Africa 100; Best Digital Bank in Africa – 2017 by Euromoney Awards; Best Retail Bank and Innovation in Banking both in 2018 by the African Banker Awards.

In November 2013, the Central Bank of Nigeria designated Ecobank Nigeria as systemically important to the economy.

 

About NIRSAL Plc

The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc.) is a US$500million Non-Bank Financial Institution and a wholly owned corporation of the Central Bank of Nigeria (CBN). It is designed to redefine, dimension, measure, re-price and share agribusiness-related credit risk.

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