The Nigerian Competitiveness Project (NICOP) of the German Agency for International Corporation (GIZ) says it has facilitated N500 million loans for producers of value crops in partner states across Nigeria.
Ms Ana Vinambres, Head of Project, GIZ-NIPCO, disclosed this at a Learning and Exchange event, held in Lagos on Wednesday.
She added that NICOP was designed to support Micro Small and Medium Enterprises (MSMEs) in key value chains to inclusively improve tomato, ginger, chilli, leather and garment production to promote structural transformation.
The News Agency of Nigeria (NAN) reports that NICOP is a four-year project commissioned in 2018 by the German-BMZ and co-funded by the European Union under the West African Competitiveness envelope.
NICOP is being implemented by the GIZ Pro-Poor Growth and Promotion of Employment in Nigeria Programme – SEDIN, in Kano, Kaduna, Plateau, Ogun, Oyo, Lagos and Abia states.
According to Vinambres, the project is funded by donors, the European Union and the German agency with 11 million euros for the whole implementation, given to value chain players in form of inputs and capacity building and not cash.
“This money didn’t come from our pocket. We were actually facilitated from financial institutions, commercial banks, microfinance banks, BoI, the government schemes like the Anchor Borrowers Programme.
“We also facilitate through franchise, through impact investment and other different financial institutions that are going to be continuously funding.
“Our data has shown that we have been able to achieve really remarkable numbers. We have reached over 28,000 beneficiaries across all these states and over 21,000 of these beneficiaries have increased their income by over 20 per cent.
“We actually make sure that the financial institutions understand the business model of our farmers, and we empower the demand side to be ready for this finance,” she said.
Vinambres also said that fatmers were not forced to be facilitated but such transactions took place because the financial institutions and farmers believed it was a good business model to promote sustainability.
She added that the project had also supported the exports of about N600 million worth of different crops, standardisation, certification, and different measures of support that had really increased the knowledge and the capabilities of our different beneficiaries.
Mr Andrew Smith, the Access to Finance Advisor of the project, said that the mechanisms adopted had been to ecourage cluster farmers to access funds.
“The mechanisms that are in place is the theory by which a management team will accept the funding on behalf of everyone. And it means a bank only has to deal with one transaction.
“Find the people seeking to borrow, understand the people, and then potential uses of that money applied for, so it should be fairly easy to just deal with one transaction deal with a limited number of people and look at the economy of scale of a cluster and we present that cluster to a bank.
“We are not saying there are 10 people that can each make N1000, we are saying there is a business here that collectively could be worth a billion, and everyone is doing it and they are underrepresented and unrecognised.
“So, of course we evaluate each of the clusters that my colleagues in manufacturing and agriculture looked at, and there is no immediate single one size fits all solution,’’ he said.
Smith also said that the project was franchising business, private equity, diaspora investment and crowdfunding.
He said the project had also tried to de-risk the opportunities for the communities.
”The clusters are better business people because we have trained them on the agricultural practice and financial literacy,” he said.
Also speaking, Mrs Emma Odundo, Team Lead, Technical Interventions NICOP, said that some of the yields recorded had been achieved because of the varieties that had been promoted.
“Some of them are climate resilient and this has really worked with the farmers.
“We have also adopted form of business models, including contract farming and offtake agreements to be able to facilitate relationship between off-takers and smallholder farmers.
“At this point in time. We have also provided some equipment to support farmer groups to be able to help them in primary processing,” she said.
Odundo added that there were some opportunities that could be taken advantage of in Lagos.
“The most prominent was that Lagos provided an enabling business environment for various registrations, opportunities to promote product penetration through a population that provides a range market,” she said.
NAN reports that stakeholders represented at the meeting included, the Federal Ministry of Industry Trade and Investment, Lagos State Employment Trust Fund (LSETF), beneficiaries and commercial banks.
