Nirsal (Loan) Credit Risk Guarantee – The NIRSAL Credit Risk Guarantee (CRG) is the core service provided by NIRSAL Plc.
The CRG is an instrument issued to protect financiers and investors from possible losses in a finance/credit transaction through a risk sharing arrangement under which NIRSAL indemnifies the lender or investor of the Principal and accrued Interest to the limit of a pre-agreed CRG rate. The offer of the NIRSAL CRG serves as a comfort to financiers and investors, encouraging them to lend to the agribusiness.
The NIRSAL CRG secures agribusiness loans against losses over the life of the underlying credit contract between a financier and actors across all segments of the agricultural value chain. It covers credit in the form of term loans, and/or debt instruments such as short, medium, and long-term notes, excluding overdrafts.
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The NIRSAL CRG also covers the credit risk of default on loan principal and the accrued interest. It is purchased at 1% (upfront payment) of the loan value and subsequent outstanding balances of the loan annually.
CREDIT RISKS GUARANTEE (CRG) CATEGORIES
1. Smallholder/scaleFarmers and Farmer Groups
Single Obligor Limit – ₦5Million
CRG Cover – 75% of the loan
2. Cooperatives
Single Obligor Limit – ₦50Million
CRG Cover – 75% of the loan
3. Large Scale Primary Producers
Single Obligor Limit – ₦2Billion
CRG Cover – 50% of the loan
4. Mechanization
Single Obligor Limit – ₦50Million
CRG Cover – 75% of the loan
5. Large Scale Mechanization
Single Obligor Limit – ₦2Billion
CRG Cover – 50% of the loan
6. Processors
Single Obligor Limit – ₦2Billion
CRG Cover – 50% of the loan
7. Integrated Farms
Single Obligor Limit – ₦2Billion
CRG Cover – 30% of the loan
8. Logistics Providers
Single Obligor Limit – ₦2Billion
CRG Cover – 30% of the loan
9. Agro-dealers, Input and Equipment Suppliers
Single Obligor Limit – ₦2Billion
CRG Cover – 30% of the loan
CRG REQUEST & ISSUANCE PROCESS / Nirsal (Loan) Credit Risk Guarantee
STEP 1 – Farmer/Agribusiness applies for a loan from a Commercial Bank and requests for NIRSAL CRG cover.
STEP 2 – Bank approves the loan and sends CRG request and relevant documents to NIRSAL on behalf of the farmer/agribusiness.
STEP 3 – NIRSAL reviews Bank’s request and checks documents for completeness, accuracy and validity.
STEP 4 – If documents are in order, NIRSAL and Bank conduct farm/site visitation and prepare a report which is subjected to NIRSAL’s internal approval process.
STEP 5 – Upon approval by NIRSAL and payment of CRG fee, NIRSAL issues CRG in favour of the Bank on behalf of the farmer/agribusiness.
STEP 6 – Bank disburses the loan to farmer/agribusiness and NIRSAL commences project monitoring through its nationwide Project Monitoring, Reporting & Remediation Offices.
INTEREST DRAW BACK (IDB) / Nirsal (Loan) Credit Risk Guarantee
The NIRSAL Interest Drawback Scheme is designed to reward diligent borrower behaviour through discretionary rebates of up to 40% of interest paid on NIRSAL CRG-backed agribusiness loans, thereby reducing the effective interest rate for borrowers with a good credit history.
Rebate payments apply only to pre-approved CRG transactions and are made every 90 days subject to compliance with the loan’s underlying conditions and timely repayments of Principal and Interest during the review period.
Qualification of an obligor for IDB is at NIRSAL’s discretion.
To scale and expand your agribusiness often requires access to credit. NIRSAL’s Loan Facilitation services help you to structure your agribusiness finance and investment needs, understand your financial requirements and match your agribusiness (supported by NIRSAL’s Credit Risk Guarantee), with the appropriate finance and investment options you require.
AGRIBUSINESS LOAN FACILITATION FORM / Nirsal (Loan) Credit Risk Guarantee
To begin, fill in the required information below:
NOTICE: FOR LOANS OF N10MILLION AND BELOW, PLEASE CONTACT NIRSAL MICROFINANCE BANK
Click to access e-form through the link. Scroll down to the bottom and fill the form.
