The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending on Monday said it had secured additional funding of N14.5bn from banks to the agriculture sector.

The agency said this in a statement issued in Abuja.

The statement said the amount was mobilised from banks after extensive presentations on NIRSAL’s agribusiness models, financing frameworks, and methodologies.

The presentation was made to officials of Union Bank, Sterling Bank, Guaranty Trust Bank, United Bank for Africa, Keystone Bank, Standard Chartered Bank, and Heritage Bank, among others.

The purpose of the exercise is to inform them of promising investment-friendly developments in Nigeria’s emerging agriculture/agribusiness sector and the expanding opportunities for value chain actors, with the aim of unlocking banks’ balance sheets to agribusiness lending.

It said the meeting followed the discovery that over the years, the agriculture sector had received less than three per cent of total bank lending, leaving it largely underdeveloped and its vast potential for economic growth untapped.

This, according to the statement, was why the Central Bank of Nigeria created NIRSAL to collaborate with all public and private sector stakeholders to fix broken agricultural commodity value chains and de-risk the sector to enable increased inflow of finance and investments.

The Managing Director, NIRSAL, Mr Aliyu Abdulhameed, said in the statement that funding for a further N48bn was at various stages of approval.

The statement said, “NIRSAL has received strong indications that banks are interested in ‘buying’ its de-risked and structured Geo-Cooperatives.

“In the five months of these engagements with Deposit Money Banks, while leveraging NIRSAL’s Credit Risk Guarantees and other de-risking mechanisms. Over N14.5bn in additional financing from banks’ balance sheets have been catalysed and a further N48bn is at various stages of approval.

“So far, the NIRSAL risk-led agricultural financing approach is adjudged to be in high resonance with banks risk/return imperatives.

“The prior perception of high risk by banks is gradually giving way to a new-found faith in the new business opportunities the sector has to offer.”

He said going forward, the enhanced understanding of NIRSAL’s role in securing a safe, profitable and a globally competitive agribusiness economy was expected to elicit greater portfolio commitments from Nigerian banks.

This, according to him, will facilitate a greater flow of finance to structured, agriculture-related investment opportunities in Nigeria.