NIRSAL, Morocco’s Bank Of Agric Reinvigorates Financing Agreement For Farmers

The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending and the Credit Agricole Du Maroc (CAM) have signed a Memorandum of Understanding (MOU) that is geared towards the promotion of inclusive growth and sustainable development of the agriculture sectors of both countries.

The Managing Director/Chief Executive Officer of NIRSAL Plc, Mr Aliyu Abdulhameed, and the Chairman of the Management Board of Credit Agricole Du Maroc (CAM), Mr Tariq Sijilmassi, signed the MOU, thereby committing to the mutual prospecting and implementation of agriculture-oriented projects that benefit both organisations and their host countries.

The pact would facilitate finance and investment, trade and support systems across agricultural value chains, with emphasis on smallholder farmers.

A state visit to Nigeria in 2016 by the King of Morocco, His Majesty, Mohammed VI, was the backdrop for the initial pact between NIRSAL Plc and CAM, forming part of 15 bilateral agreements signed by the King and President Muhammadu Buhari on behalf of their countries.

Six years later, NIRSAL Plc and CAM met again in Rabat, Morocco to review activities under the agreement and rekindle the partnership.

NIRSAL said in a statement that the latest meeting expanded the scope of their pact to include business to business relationships, capacity building, knowledge transfer, and digital agribusiness risk management solutions.

Among the short and medium-term undertakings outlined by the MOU, are that NIRSAL Plc and CAM will work towards presenting a common front to the managers of the Land Degradation Neutrality (LDN) Fund.

This would assist in attracting global finance for sustainable agribusiness investments.

The statement said that CAM’s deep experience in developing solutions for the financial integration of smallholder farmers in Africa would also benefit NIRSAL Plc in opening up more pathways for critical finance to enter the agricultural primary production sub-sector in Nigeria.

Speaking during the MOU signing, Abdulhameed listed NIRSAL Plc’s areas of need to include the development of financing products that suit the seasonality of agriculture and other farming contexts, emphasizing the difficulties smallholders experience in keeping to the terms of conventional bank financing products.

Abdulhameed expressed confidence that innovative financing products that speak to the peculiarities of agricultural primary production would help agriculture financiers to maximize the benefits and incentives in the 75 per cent Credit Risk Guarantee (CRG) issued by NIRSAL Plc for primary production projects, as well as Interest Drawbacks (IDB) of up to 40 per cent that diligent borrowers can enjoy.

Leveraging NIRSAL’s CRG facility, he said commercial lenders in Nigeria have injected over N152.8bn into the agriculture sector in the last six years, with credit crystallization rate still below one per cent.

Beyond its agricultural expertise, CAM is also involved in several other financing projects, particularly in rural areas, through its network of 543 branches across the Kingdom of Morocco.

With special abilities in the design and deployment of products and services that are tailored to customers’ needs, CAM has ingrained itself into the very fabric of Moroccan life whilst holding equally sizeable portfolio abroad.

Consequently, through its sixty-year existence, the bank has granted over $10bn in loans, making a profit of $430m.

The agreement between NIRSAL Plc and CAM draws further relevance and validation from the South-South Cooperation – the technical cooperation among developing countries in the Global South.

It is a tool used by the states, international organisations, academics, civil society and the private sector to collaborate and share knowledge, skills and successful initiatives in specific areas such as agriculture development, human rights, urbanization, health, climate change, etc.