THE NIGERIA INCENTIVE-BASED RISK SHARING SYSTEM FOR AGRICULTURAL LENDING (NIRSAL)
De-Risking Agriculture | Facilitating Agribusiness
REQUEST FOR EXPRESSION OF INTEREST: NIRSAL-MECA AGRICULTURAL MECHANIZATION VENDOR FINANCING AND LOT SHARING SCHEME FOR FARM TRACTOR OWNERSHIP
Improving productivity in the Nigerian Agricultural sector through agricultural mechanization operations provides a profitable investment opportunity for establishment and prospective participants in agribusiness. It is estimated that at least 15,000 new farm tractors will be required annually over the next 10 years to meet the basic mechanization needs of smallholder farmers. To fill this need and as a part of its Comprehensive Agricultural Mechanization Program, NIRSAL PLC is collaborating with the Machine and Equipment Consortium Africa (MECA) to introduce the NIRSAL/MECA-Agricultural Mechanization Vendor Financing and Lot Sharing Scheme (VFLoS).
The Scheme is designed to facilitate the acquisition of brand-new farm tractors and implements through a blend of affordable vendor financing and crowd funding/Lot sharing arrangement. The package comes complete with a professional operational management service contract that ensures hassle-free repayment and maintenance while generating attractive profit for the lot holder/subscriber.
THE NIRSAL/MECA – AGRICULTURAL MECHANIZATION VENDOR FINANCING AND LOT SHARING SCHEME (VFLoS)
The NIRSAL/MECA VFLoS is a collaborative arrangement through which NIRSAL designs and facilitates financing for tractors and other agricultural equipment in collaboration with its lead partner, MECA and other commercial and operating partners such as Agricultural Mechanization Service Providers (AMSPs), Individuals, Cooperatives, Associations, Original Equipment Manufacturers (OEMs), Trustees, Machine and Equipment Vendors in a mutually beneficial commercial ecosystem aimed at profitably boosting the supply of agricultural mechanization assets and services in Nigeria for increased agricultural production.
Considering the capital-intensive nature of farm tractors and equipment, participants are pooled in clusters of between 2 and 40 subscribers/Lot holders to contribute up to 50% of the value of the asset as equity. Depending on financial capacity, provision for a single subscriber/Lot holder also exists. The OEM or Vendor supplies the tractor and set of implements under a 3years credit arrangement backed by NIRSAL Credit Risk Guarantee. The set of tractor and implements are deployed for farmland preparation and other mechanization rentals under a commercial management contract service managed by MECA that ensures full repayment of the vendor credit with returns to the Lot holder/subscriber. Starting from a minimum subscription of about N138,000 a subscriber/Lot holder can be a part owner of a set of farm tractor and implements. The security interest of all parties in the tractors shall be held under Trusteeship arrangements and shall be registered with the National Collateral Registry (NCR) as contained in the approved NIRSAL Framework on the Scheme.
NIRSAL/MECA –VFLoS PARTNERS AND BRANDS
The Scheme in partnership with representatives of leading Original Equipment Manufacturers (OEMs) such as TAK Tractors Ltd, Whitfield Ventures Ltd and Harvard Industries Ltd. Other OEMs who prequalify will continuously be enrolled in the Scheme. The designated brands under the Scheme are Sonalika and New Holland Tractors. Subscribers are free to choose from a wide range of tractor capacity ratings of 50HP, 55HP, 60HP and 75HP along with a variety of operational implements such as Plough, Harrow, Ridger, Tipping Trailer, Planter, Thresher, Harvester or other implements.
ELIGIBILITY FOR PARTICIPATION
The Scheme is open to Individuals, Cooperatives, Associations and Corporate entities interested in owning farm tractors and implements for use in agribusiness and income generation under a professionally managed agricultural mechanization rental service. Participants are required to subscribe in Lot clusters and contribute the value of the Lots desired.
• Affordable ownership of farm tractor and implements whether a subscriber is into farming or not
• Extra income from investment while the management contact service provider is paying the Vendor Credit
• Accelerated repayment option and transferable Lot ownership for an early exit if desired
• Professionally managed transactions with multiple stakeholders control for transparency and accountability
• Enhanced financing opportunity with clear risk mitigation framework for a sustainable private sector-led agricultural mechanization enterprise.
TERMS AND CONDITIONS
a. The Lot Holders/Subscriber pay 50% of Cost of a set of tractor and implements supplied
b. The Vendor grants 50% credit on the cost of tractor and implements supplied
c. NIRSAL provides 75% Credit Risk Guarantee (CRG) to the Vendor
d. Vendor Credit carries a maximum tenor of three (3) years and is repaid monthly installments, with an option for pre-liquidation
e. Tractor and implement come under a technical management service agreement with MECA until the Vendor Credit is fully paid and NIRSAL’s credit Risk Guarantee discharged
f. Tractor delivery period of twelve (12) weeks including shipping, clearing, delivery, registration, tracking and deployment for field operations applies.
HOW TO APPLY
Interested individuals, organizations, corporate entities and governments should send a written letter of Expression of Interest (EoI) for registration as an authorized Lot Cluster Partner and prospective subscriber under the NIRSAL/MECA – Agricultural Mechanization Vendor Financial and Lot Sharing Scheme within (21) twenty-one days from the date of this publication. Please note that only shortlisted and qualified entities will be contacted.
ENQUIRIES (Please contact NIRSAL or MECA)
NIRSAL Head Office
Plot 1581, Tigris Crescent, Maitama,
Abuja – FCT.
Call: 0813 988 2220 -5
E-mail: [email protected]
MECA Machine and Equipment Consortium Africa (MECA)
MECA Head Office
Asokoro, A-WING, Plot 2542, Hassan Usman
Katsina Street, Asokoro, Abuja.
Call: 0908 111 1222, 0908 222 2333
E-mail: [email protected]
SOURCE: DAILY TRUST