The Federal Government through the National Agricultural Development Fund has entered into a partnership with German climate fintech company, YAPU Solutions GmbH, to strengthen its capacity to identify, assess and manage climate related risks within its agricultural finance portfolio.
The partnership, formalised through a Memorandum of Understanding, is expected to enhance the Fund’s ability to incorporate climate risk considerations into agricultural lending and develop financing approaches that can better respond to the challenges facing smallholder farmers.
According to a statement issued by NADF, the agreement provides a framework for cooperation in climate risk assessment, adaptation and resilience finance, data management and other areas aimed at strengthening agricultural financing.
The agreement was signed by the NADF Executive Secretary and Chief Executive Officer, Mohammed Ibrahim, and the Chief Executive Officer and Founder of YAPU Solutions, Christoph Jungfleisch.
Under the partnership, both organisations will work on improving the use of climate and agricultural data to support decision making across NADF’s financing operations. The collaboration is also expected to provide the Fund with tools and technical knowledge for evaluating climate related risks associated with its agricultural finance portfolio.
The partnership will cover climate risk analytics, data infrastructure, operational frameworks, capacity development and pilot initiatives. YAPU Solutions is expected to contribute technical expertise and digital tools, while NADF will support implementation through relevant operational engagements and agreed pilot projects.
The statement said the collaboration would further create opportunities to design or improve financial products for smallholder farmers, with particular attention to the increasing risks that climate change poses to agricultural production.
It added that the two organisations would explore financing mechanisms that could help farmers strengthen their capacity to adapt to climate related shocks while improving the resilience of agricultural investments.
The NADF said the partnership would combine climate risk information, digital solutions and agricultural finance to strengthen institutional risk management and support more informed lending decisions.
Through the proposed pilot projects and capacity building activities, the Fund is expected to deepen its understanding of climate risks affecting agricultural borrowers and strengthen the systems used to manage those risks across its financing portfolio.
