Why SMEs should know about NIRSAL

Why SMEs should know about NIRSAL

November 25, 2020 0

If you are an SME owner in Nigeria and you don’t know about NIRSAL, you are missing a lot. This body presents SMEs in Nigeria with so many benefits. In this post, we will discuss NIRSAL, its mission and vision, its benefits, and how to get loans from them.


NIRSAL is an acronym that stands for the “Nigeria Incentive-Based Risk Sharing System for Agricultural Lending.” The Central Bank of Nigeria set up this body. This was in conjunction with the Nigerian Bankers’ Committee and the Federal Ministry of Agriculture and Rural Development.

While many people consider NIRSAL to be a bank, it isn’t. Instead, it has a $500 million backing as a Non-Financial Institution. The CBN solely owns the body. It was established to re-price, redefine, measure, share, and dimension credit risks related to the agri-business in Nigeria.

Why SMEs should know about NIRSAL
NIRSAL presents SME owners with several benefits

This body has one mandate to stimulate affordable finance flow and investments in the agricultural sector. The way to achieve this is by eliminating the impending risks within the finance value chain of the agricultural sector. It also helps to develop long-term capacity, institutionalise incentives, and fix the agricultural value chain. NIRSAL achieves this though its five strategic pillars:

a.      Risk sharing

b.      Technical assistance

c.       Insurance

d.      Rating

e.      Incentives

Why should SMEs know about NIRSAL?

If you are an SME owner, we guess that you are wondering why you should know about NIRSAL. As you can tell from the name, NIRSAL was established mainly to reach out to businesses in the agricultural sector. This means that there are several benefits that you can enjoy from this body if your business is in this sector.

Here are some of the benefits of NIRSAL to SMEs in the agricultural sector and by extension, other businesses:

Improved access to credit

Financing is one of the major challenges of SMEs in Nigeria and anywhere in the world. One of the easiest ways to raise finances for business purposes is to collect loans. If you run a business in Nigeria, you will agree that there are so many hindrances to getting loans in Nigeria.

Businesses that are signed up under NIRSAL do not have to worry about this. The CBN established NIRSAL in conjunction with several bodies. This means that the body can provide loans to businesses from several sources.

Access to improved inputs

Asides from funding agri-businesses also need access to improved inputs. Examples of such inputs include healthy seeds and fertilisers. Access to these inputs helps to improve the yield of different farms.

There is a ripple effect here as the use of improved input means increased yield that results in more profits. The idea here is that NIRSAL helps farmers get access to quality grains and seedlings from certified bodies. With this, farmers can now increase their yield and are even sure of off-takers for their products.

Creation of jobs

With increased productivity, SMEs in the agricultural sector can scale up their businesses. Once businesses become larger, there is a need for more hands. This means that businesses can now employ more hands-on their farms and other parts of the value chain.

Poverty alleviation and improved living standards

Like we said earlier, all the benefits of NIRSAL are linked. Now that there is increased productivity resulting from improved inputs, businesses can scale up. The result of this is more jobs that help to reduce the level of poverty within the country.

With poverty alleviation comes improved living standards. This is because people now have a higher purchasing power, and there is a high supply of food and other products.

Listed above are the reason why SMEs in Nigeria should know about NIRSAL. Have you heard about the NIRSAL Microfinance Bank? We will discuss it in the next section of this post.

NIRSAL Microfinance Bank

Many people confuse NIRSAL with NIRSAL Microfinance Bank. The latter is also referred to as the NFMB, and it is a subsidiary of NIRSAL. This bank was established in 2019 and has since become one of the top microfinance banks in the country.

The driving vision of the NFMB is to provide high-quality financial services to registered customers. Today, this microfinance bank has customers within and outside Nigeria. Here are some of the services that the NFMB offers:

Agricultural, Small, Medium Enterprise Scheme

Under this loan scheme, SMEs can access up to N10 million. Here is a list of the businesses that are eligible for this loan:

a.      Creative art industries – This includes businesses in arts, entertainment, textile and apparel, beauty, fashion, etc.

b.      Manufacturing and Industrial sector – Agriculture, agro-allied businesses, automobiles, etc.

c.       Information and Communication Technology – Publishing, media, and telecommunications.

d.      Hospitality – Event management, catering, hotels, etc.

All these loans have a single-digit interest rate which may climb to a maximum of 9% per annum. The good news here is that you don’t need collateral to apply for these loans.

Anchor Borrowers’ Program

This program is designed for building and fostering links between companies within the processing sector and small-scale farmers. The farmers fall under the category of those that deal in several essential agricultural products.

NFMB Access Target Account

Just as the name implies, it is a saving scheme. The scheme is designed to assist individuals and SMEs in Nigeria that are planning to save better. It runs for a specified period with a definite target.

Customers of the NFMB can cultivate a healthy saving culture through this scheme. In the end, the funds can be used for purchasing goods and equipment, rent, and other important reasons. The account has a specific number of withdrawals that will be determined from the onset.

Contacting NIRSAL

Now that you know about NIRSAL, the next thing on your mind is how to contact this body. You can either walk into any of their offices. An easier method is to visit their website or contact them via social media.


Congratulations!!! Now you know about NIRSAL and the benefits that this body offers your business. We have also told you about NIRSAL Microfinance Bank and their services. Why else should a business know about NIRSAL? Tell us in the comments section.

Samuel Moore
Samuel Moore
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