Nigeria’s agricultural fund NADF teams up with Sahel Capital to finance SMEs
By the AFREEQUE newsroom, based on Vanguard
Illustrative image · LekePOV · Pexels · Licence PexelsNigeria’s National Agricultural Development Fund (NADF) and the manager Sahel Capital have signed a memorandum of understanding to widen agricultural SMEs' access to affordable financing. The partnership aims to reduce borrowing costs through blended financing, said NADF Executive Secretary Muhammed Ibrahim.
Nigeria’s National Agricultural Development Fund (NADF) and Sahel Capital Fund Manager Limited, an investment fund management company, have signed a memorandum of understanding to widen agricultural SMEs' access to affordable financing, Vanguard reports. The partnership aims to attract more private investment into agriculture and to reduce the cost of borrowing through blended financing arrangements.
NADF Executive Secretary Muhammed Ibrahim said the agreement marks a break from conventional agricultural financing. NADF will bring its development mandate and its knowledge of national agricultural priorities. Sahel Capital will provide its investment expertise and its knowledge of markets and value chains.
The two institutions will study the feasibility of joint financing, with NADF operating alongside capital managed by Sahel Capital, including the Sahel Agribusiness Private Debt Fund. The arrangement could include risk sharing and concessionary loans. Sahel Capital is also to structure the investments, identify eligible businesses and set up monitoring. The memorandum also provides for information sharing, building a pipeline of bankable projects, technical assistance and capacity building.
Sahel Capital Associate Director Mezuo Nwuneli said that many agribusinesses currently borrow at rates of 24% to 27%.
This memorandum is part of a series of announcements on Nigerian agriculture, following the 500 million dollar agricultural project and the threats from El Niño to harvests, published on 9 November.
