On 13 November 2017, the state-owned Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in collaboration with the Union Bank of Nigeria, established an Agriculture Finance Scheme. 



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Union Bank of Nigeria. 2017. Union Bank Announces N10 billion Agricultural Fund in Partnership with NIRSAL.

Daily Trust. English. 2017. NIRSAL, Union Bank seal N10bn loan deal for farmers.

Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. NIRSAL Unlocks N10B Agriculture Finance from Union Bank.

Inception date: 13 Nov 2017 | Removal date: open ended
Still in force

State loan

On 13 November 2017, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NISRAL) entered into a partnership with the Union Bank of Nigeria. The core scope of this partnership was to establish an Agriculture Finance Scheme. This scheme is designated to boost the overall rate of financing that is being provided to local agricultural projects in Nigeria.  Therefore, according to official statements, this Agriculture Finance Scheme is aimed to benefit smallholder farmers, cooperatives/farmer groups, large-scale primary producers, integrated farmers, processors, agro-dealers as well as input and equipment suppliers.

Consequently, the highlighted Agriculture Finance Scheme is aimed to function according to the following principles : 

  • Union Bank of Nigeria is set to establish a lending budget amounting to N 10 billion (circa USD 27'000'000). This lending budget is to be established in order to provide loans to local agricultural projects that are promoted by the  Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. Official statements provide no details in terms of the conditions under which the Union Bank of Nigeria will provide their loans to the beneficiaries under the Agriculture Finance Scheme.
  • NISRAL is to provide credit guarantees for all the agricultural project loans are to be granted under the N 10 billion (circa USD 27'000'000) lending budget of the Union Bank of Nigeria. The credit guarantees that are to be provided by NISRAL amount from 30% to 75% of the total value per granted loan. 
  • NIRSAL via its Project Monitoring, Reporting and Remediation Offices (PMRO) is set to supervise the manner in which the loan beneficiaries are using the means of financing that are provided to them under this Agriculture Financing Scheme ( in order to ensure that the provided loans are being adequately utilized). Furthermore, according to official sources, NIRSAL will ensure the effective use of loan resources by its beneficiaries through providing them with inputs such as improved seedlings, fertilizer, crop protection products etc. Furthermore, beneficiaries will also be linked with the tractor and other service providers which will require direct payments for their provided services.


NIRSAL is a state-owned Nigerian institution designed with the scope of ensuring the existence of affordable financing schemes to all players along the agricultural value chain in Nigeria. NIRSAL has several schemes or facilities embedded in its institution: a) Risk-sharing Facility, b)Insurance Facility, c)Technical Assistance Facility, d)Holistic Bank Rating Mechanism and e)Bank Incentives Mechanism. The Risk-sharing Facility (USD 300 million worth) is a credit guarantee-based mechanism under which NIRSAL does share the potential losses that commercial banks might incur in the process of lending to local agriculture beneficiaries. Specifically, via the Risk Sharing Facility, NIRSAL aims to encourage commercial banks to provide loans to local agriculture players via de-risking their loan provision investments through the credit guarantees it provides. The Insurance Facility (USD 30 million worth), on the other hand, does aim to optimize the insurance infrastructure available to local players in the industry of agriculture via : a) expanding the coverage of existing products provided by the Nigerian Agricultural Insurance Corporation and b) by piloting and scaling new products, such as weather index insurance, pest and disease insurance, life insurance, yield based as well as price index insurance. The Technical Assistance Facility (USD 60 million worth) is a mechanism of NIRSAL which aims to: a) provide banking institutions with the expertise and knowledge they would need in order to lend sustainably to the local agriculture sector; b) provide agricultural players with the necessary expertise to use the loans that they acquire more effectively (and therefore generate better quality output). Furthermore, the Holistic Bank Rating Mechanism (USD 10 million worth) aims to provide a rating for banking institutions on the criteria of the effectiveness of their agricultural lending as well as their overall social impact. Lastly, the Bank Incentives Mechanism (USD100 Million) provides further incentives (primarily cash-based) for Banks which have a high rating under the Holistic Bank Rating Mechanism -- in order to boost their lending to the national agriculture sector of Nigeria.

Union Bank of Nigeria is a Nigerian-based commercial bank.


The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.