On 15 September 2017, the state-owned Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in collaboration with  Stanbic IBTC Bank, established an Agriculture Finance Scheme.



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Nigeria Incentive-Based Risk Sharing System for Agricultural Lending. 2017. English. NIRSAL Partners Stanbic IBTC on N50Billion Agric Financing Scheme.

Inception date: 15 Sep 2017 | Removal date: 31 Dec 2018
Still in force

State loan

On 15 September 2017, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) signed a MoU with  Stanbic IBTC Bank. 

The core scope of this MoU was to establish an N 50  billion (circa USD 138 million) Agriculture Finance Scheme. This scheme is designated to boost the overall rate of financing that is being provided to local agricultural projects revolving around livestock, crops, mechanization, logistics and poultry. Furthermore, according to official statements, this financing scheme is designated to create 92 thousand local jobs.

Furthermore, the loans to be provided under the Agriculture Finance Scheme are expected to foster the cultivation of an additional 11'195 hectares of arable land in Nigeria -- increase the National Food Output by up to 50,580MT in yield.

The MoU was signed exclusively for the 2017/2018 dry and wet season. 

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

  • Stanbic IBTC Bank is set to initially commit N 10 billion (circa USD 27'000'000) in order to provide loans for projects under the umbrella of the highlighted Agricultural Financing Scheme. This sum is set to gradually increase (up to N 50 billion) contingent upon the development milestones of this Scheme. Furthermore, official statements provide no overview of the terms under which Stanbic IBTC will provide loans to beneficiaries under the Agriculture Finance Scheme. 
  • NIRSAL is to provide credit guarantees for all the agricultural project loans that are to be granted under the Agriculture Financing Scheme. The credit guarantees that are to be provided by NISRAL amount up to 75% of the total value of one granted loan, and are part of NIRSAL Risk Sharing Facility. 
  • NIRSAL via their Project Monitoring, Reporting and Remediation Offices are to ensure that the loans delivered under the Agriculture Finance Scheme will be used adequately (and in line with the loan approval standards) by their beneficiaries.
  • NIRSAL is set to provide the beneficiaries of the loans under the Agriculture Finance Scheme with the following benefits embedded under ts Technical Assisstance Facility: a)  technical assistance on best agricultural practices, b) facilitated access to inputs such as fertilizer, seedlings and other relevant modern practices.


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), 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) 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) 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. 

Stanbic IBTC Bank 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.