By Oladisun Amosun
Members of the House of Representatives have recommended the repositioning of the Nigeria Incentive Based Risk Sharing System for Agricultural Lending and De-risking of Agric-business in the country.
Towards this end, the House in plenary urged the Central Bank of Nigeria (CBN) to increase agricultural lending by banks from 1.4 – 7% of total lending within the next five years.
The House also recommended to the Apex Bank to through the commercial banks, ensure 50% of the lending to Small Holder Farmers (SHF) through microfinance institutions, farmers cooperatives and other value chain commodity associations at an interest rate of 7.5 – 10.5%
This follows a motion to this effect raised by Rep. Uchenna Harris Okonkwo which was overwhelmingly carried by members at plenary.
Rep. Okonkwo in adopting the motion noted that with the prevailing ailing economy and impoverishment in the country, coupled with increased hunger due to decreased agricultural productivity triggered by low capital investment, now was the time to streamline NIRSAL in order to achieve its set mandate.
He noted NIRSAL’s objective of enhancing agricultural and financial value chains through a holistic $500 million public-private initiative to define, measure, price and share agro- business risks.
The House also resolved that to reverse the current trend in low agricultural production, it is necessary to provide NIRSAL with additional $3 billion for lending to genuine agricultural value chain borrowers across the nation.
The House similarly mandated the Committees on Banking Regulation and Agricultural Production and Services, Nutrition and Food Security and Finance to monitor compliance and revert to the House within 4 weeks for further legislative action