The Federal Government through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) said it had disbursed $373 million to farmers in the past year to boost production of export crops.
The agency is saddled with the responsibility of de-risking credit to farmers, part of government’s plan to increase revenue from farm exports and reduce the country’s dependence on oil, Bloomberg reports.
The beneficiaries of the credit facility are mainly small-holder farmers growing cotton, rice, oil palm, cassava and corn, according to the Managing Director of the state-owned agricultural-lending facilitator, Aliyu Abdulhameed.
“At average yield of 4 tons per hectare, these optimized small-holder farmers’ production would generate a gross output of about 16 million tons,” he said.
Abdulhameed projected that revenue from the exports would hit N1.6 trillion by the end of this year.
In 2012, the Central Bank of Nigeria (CBN) created NIRSAL as a risk-sharing system with a mandate to enhance the flow of affordable finance and investments into fixed agricultural value chains.
The agency works with banks to guarantee as much as 75 percent of loans to agriculture.