The NIRSAL Credit Risk Guarantee (CRG) is an instrument issued to protect financiers and investors from possible losses in a finance/credit transaction through a risk-sharing agreement under which NIRSAL Plc 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 financiers 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 except those with a defined tenor ( eg advances).
The NIRSAL CRG also covers the credit risk of default on loan principal and the accrued interest. It is purchased at 1% CRG fee upfront payment) of the loan value and subsequent outstanding balances of the loan annually, including 1% PMRO fee for transactions without a warehousing arrangement.
Benefits of NIRSAL Credit Risk Guarantee (CRG) Agric Business Loan
Encourages the flow of finance and investment into agriculture.
Ensures the reduction of risk for the investor, financial institution or Counterparty.
Aids in fixing broken links in the Agricultural Value Chains (IAVC).
Increases lending to Agriculture, thereby enabling the sector to contribute to Nigeria’s GDP and diversify the economy.
Facilitates access to Interest Drawback (IDB) support for borrowers.
CRG OBLIGORS LIMIT
- Smallholder Farmers and Farmer Groups – 5 million Naira – 75% of the loan
- Cooperatives – 50 million naira – 75% of the loan
- Large Scale Primary Producers – 2 billion Naira – 50% of the loan
- Mechanization – 50 million Naira – 75% of the loan
- Large scale Mechanization – 2 billion Naira – 50% of the loan
- Processors – 2 billion Naira – 50% of the loan
- Integrated Farms – 2 billion Naira – 30% of the loan
- Logistics Providers – 2 billion Naira – 30% of the loan
- Agro dealers, Input and Equipment Suppliers – 2 billion – 30% of the loan
CRG REQUEST & ISSUANCE PROCESS
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.
For more Information ” Visit https://nirsal.com/credit-risk-guarantee/#!/crg
