Improving Agricultural Market Performance:
Creation and Development of Market Institutions
87
scale up new products, such as weather index insurance, new variants of pest and
disease insurance, etc.
3. Technical Assistance Facility (US$60 million). Provides of technical assistance to
equip banks to lend sustainably to agriculture. And to producers to help them borrow
and use loans more effectively, and to produce more and better-quality goods for the
market.
4. Holistic Bank Rating Mechanism (US$10 million). Rates banks based on the
effectiveness of their agricultural lending and its social impact.
5. Bank Incentives Mechanism (US$100 million). Complements NIRSAL’s first three
pillars and offers banks additional incentives to build their long-term capabilities to
lend to agriculture.135
A illustrates, NIRSAL works along the entire agro-food value chain in Nigeria, with
financial instruments adapted to the needs of each set of value chain participants and
delivered in coordination with other stakeholders.
NIRSAL has established partnerships with a wide range of public and private institutions,
within Nigeria and internationally. These include the major commercial banks in Nigeria, the
Nigerian Investment Promotion Commission, the Ministry of Agriculture and Rural
Development, the Bank of Industry and the Bank of Agriculture (state-owned development
finance institutions), the Nigeria Raw Materials Research and Development Council (a public
agency under the Ministry of Science and Technology), IFAD, the AfDB, USAID, UNIDO, GIZ, and
more than 30 private agribusiness groups.
Figure 5 – NIRSAL’s agro-food value chain interventions
Source: Investment Consulting Associates – ICA (2017), based on NIRSAL (2017)
Working with commercial banks, NIRSAL provides a credit risk guarantee (CRG) of between
30% and 75% of loan value, and an interest drawback program ranging from 20% to 40.
135 NIRSAL (2017), Our Core Focus, available at [Accessed June 2017].
Input
Producers
Agriculture Value Chain
ENABLERS
Infrastructure Credit Bureau Policies Extension Services Price Stability Boards
Farmers
Agro
Dealers/Stor
age
Agro
Processors
Industrial
Manufacturer
s
Distribution
& Exports
Loan Product
Dev.
Agricultural Financing Value Chain
Credit
Distribution
Loan
Origination
Credit
Assessment
Managing &
Pricing for
Risk
Loan
Disbursemen
t