*35,160 Farmers Beneficiaries
Abuja – Aliyu Abdulhameed, Managing Director/CEO of the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) disclosed on Thursday that the company has facilitated over N102 billion in loans from commercial banks since its inception, across the various agricultural value chains in the country.
He said the company’s intervention in the sector has created well over 400,000 jobs with 35,160 farmers benefitting from various insurance products and a total 36,347 hectares under cultivation nationwide.
NIRSAL Plc, a wholly-owned corporation of the Central Bank of Nigeria (CBN), is a US$500million Non-Bank Financial Institution, he said is specifically designed to redefine, measure, re-Price and Share agribusiness-related credit risk.
Addressing journalists in Abuja, Mr Abdulhameed said the corporation has impacted the sector since coming on stream, lifting many farmers out poverty via risk mitigation. He said farmers working with NIRSAL no longer have to be in perpetual fear associated risks in various agric value chains, be they diseases, climatic factors and uncertainties in the market.
“By its mandate, NIRSAL is not a lending institution but was created to stimulate the flow of affordable finance and investments into fixed agricultural value chains.
“This, it does, through fixing of agricultural value chains, building long-term capacity, and institutionalising incentives for agricultural lending leveraging its five (5) strategic pillars namely: Risk Sharing, Innovative Insurance Technical Assistance, Incentive Mechanism and Rating.
“NIRSAL serves as a catalyst that enables providers of finance and investment, lend and invest in agribusinesses leveraging on its Credit Risk Guarantees and Risk Management Products, tools, techniques, methodologies and strategic partnerships”.
NIRSAL he said focus driven and innovative in delivering its mandate, and has within a short period of time attained unexpected milestone by
*Development of Area Yield Index Insurance for the CBN’s Anchor Borrowers’ Program.
*Development of Hybrid Index Product with Royal Exchange Plc and submitted to NAICOM for approval.
*Signed agreement with PETKUS Technologie GMBH on new technologies for seed and grain processing in Nigeria.
He said the company is also not relenting in nurturing future agro entrepreneurs through the implementation of its Student Knowledge Enterprise and Practice Program (NSKEP) which is aimed at helping 400-500 level students in agribusiness disciplines gain field experience and pursue entrepreneurship in agribusiness.
The agency is also pioneering mechanized farming via the “operationalization of the Financing Framework for the Acquisition & Rehabilitation of Tractors and Other Machines for redeployment into the field for productive use”.
To this end, he said the sum of N717million has been given as credit guarantee to Mass International & Equipment Nig. Ltd and Machine & Equipment Consortium for Africa (MECA) for the purchase of tractors.
“NIRSAL Action Research-based Windmill for Irrigation was set up and the pilot project is at completion phase.
“Development of concept note and financing framework for Vendor Financing Lot Sharing System (VFLOS) which is currently fully operational.
“Consultation is ongoing with the National Agricultural Seeds Council (NASC) to assist in identifying quality seed varieties for NIRSAL Interventions.
“Wheat Integrated Agribusiness Project Development (IAPD) model developed to solve the problems along the Wheat value chain from production to milling and markets,” he stated, amongst other product initiatives.
The NIRSAL CEO explained that the N102 billion it has so far facilitated from commercial backs has been diligently applied in various areas of agro-business viz, Agricultural Inputs: N6.7 Billion, Mechanization: N1.7 Billion
Primary Production: N18.6 Billion Processing: N34.4 Billion, Logistics: N580 Million, Growth Enhancement Scheme; N39.4 Billion and
rural financial institution: N940 Million.
So far he said that NIRSAL has paid out a total of N4.6 Billion as claims to providers of finance (Deposit Money Banks) on Credit Risk Guarantees that crystallized while an. additional N1.2 billion, has been paid to prudent borrowers as Interest drawbacks.
“It is important to state that through NIRSAL’s facilitation, over 400,000 jobs have been created and 2 Million lives positively impacted in the pre-upstream, upstream, midstream and downstream segments of the agricultural value chain, specifically in the areas of Mechanization, input supply, primary production and processing.
“NIRSAL’s goal is to expand insurance uptake by primary producers from 0.5 million to 3.8 million by 2026 and continually develop insurance products that will give financial institutions and Agricultural Value Chain players the comfort they need to lend to the agricultural sector while building the capacities of underwriters,” he said.