NADF, Sahel Capital Eye Lower Lending Rates for Agribusiness SMEs.
Partnering Sahel Capital Fund Manager Limited, the initiative seeks to develop a blended funding arrangement aimed at lowering borrowing costs and attracting more private investment into the agricultural sector.
Under the proposed arrangement, the two institutions will explore combining NADF’s development financing with private capital managed by Sahel Capital to provide cheaper funding for small and medium-sized enterprises (SMEs) across agricultural value chains.
The initiative comes against the backdrop of prohibitively expensive commercial lending, with agribusinesses currently borrowing at interest rates of between 24 and 27 per cent, according to Sahel Capital, a development that continues to constrain expansion, investment and productivity among agricultural businesses.
Speaking at the signing of a Memorandum of Understanding (MoU) between the institutions, NADF Executive Secretary, Muhammed Ibrahim, said the partnership was designed to move agricultural financing beyond direct public-sector interventions towards an investment-driven ecosystem capable of mobilising sustainable private capital. He said the fund would deploy its catalytic and development mandates, and its understanding of Nigeria’s agricultural priorities, while Sahel Capital would bring investment structuring expertise, market knowledge and experience across different agricultural value chains. According to him, combining public-sector and concessionary funding with private investment expertise would help establish a financing structure capable of attracting additional investors and expanding the pool of capital available to agribusinesses. Ibrahim said the ultimate objective was to create an ecosystem in which viable agricultural enterprises could access funding, generate sustainable returns and attract further investments into the sector.
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