The House of Representatives has requested that the Central Bank of Nigeria (CBN) increase funding for the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) by $3 billion.
The Green Chamber believes that the nation’s ailing economy, widespread poverty, and rising hunger are the result of declining agricultural output, which has been caused by inadequate capital investment and insufficient finance for agricultural production.
Against this context, it recommended the central bank to guarantee that Microfinance Institutions (MFIs), Farmer Cooperatives, and value chain commodities groups enable 50% of financing to Smallholder Farmers (SHF) at interest rates ranging from 7.5 to 10.5%.
The House also urged the CBN to expand agricultural financing by banks from 1.4% to 7% of overall loans over the next five years.
The House adopted the resolution following Hon. Uchenna Okonkwo’s motion at plenary on Tuesday.
The member who presented the motion stated that in 2011, the CBN created and included NIRSAL, a dynamic, $500 million public-private project to identify, assess, price, and distribute agriculture credit risk.
Okonkwo noted that the goal of NIRSAL is to improve agricultural value and financial value chains by encouraging best practices in agricultural finance, loan use, and repayment, hence lowering the risk of agricultural loans.
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cc: Daily Post Ng
