The Development Bank of Nigeria (DBN) and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) have agreed to collaborate to promote lending to the agricultural sub-sector and its value chain.

The Managing Director of DBN, Mr Tony Okpanachi said this after signing the Memorandum of Understanding (MoU) on Wednesday in Abuja that under the partnership, NIRSAL would provide risk mitigating credit guarantees.

According to him, the bank would provide funds for onward lending to Micro, Small and Medium Entreprises (MSMEs) in the agricultural sub-sector and its value chain.

“The MSMEs if well managed have the potential to achieve key macro-economic objectives of the Federal Government like job creation, poverty alleviation, financial inclusion, development of technology and so on,” he said.

Okpanachi reiterated the commitment of the bank to alleviate financing constraints faced by MSMEs and small corporate organisations in Nigeria through the provision of financing and partial credit guarantees.

NIRSAL Managing Director, Mr Aliyu Abdulhameed said his organisation was poised to facilitating the flow of credit, finance and investments into agriculture and agribusiness.

“NIRSAL believes strategic collaborations with major stakeholders in the industry is pivotal to achieving defined and well-tailored objectives and results. It is in line with this view, that the partnership with DBN is structured.

“As Development Finance Institutions, NIRSAL and DBN share a common goal of supporting investments that will catalyse sustainable economic growth, create more jobs and equip farmers with the capital needed to thrive in the agriculture sector,” he said.

While DBN was established in 2016, by the Federal Government in collaboration with World Bank and African Development Bank with five billion dollars, to address the major financial constraints faced by MSMEs in Nigeria, NIRSAL was set up by the Central Bank of Nigeria (CBN) in 2011, with 500 million dollars to provide risk management and the flow of finance and investment in the agricultural value chain.