Chat Us Via WhatsApp - +2348099087688


The public accounts committee of the house of representatives says the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has transformed agribusiness.

Speaking during an engagement with NIRSAL’s management, Oluwole Oke, chairman of the committee, expressed satisfaction with the performance of the agency, saying NIRSAL has found a friend in the national assembly.

He applauded Aliyu Abdulhameed, chief executive officer of the agency, for his efforts to position the risk-management agency as a major driver of agricultural development in Nigeria.

Other committee members also congratulated NIRSAL for its “commendable performance” in terms of agribusiness financing, asking other agencies to learn from NIRSAL’s rigorous processes of due diligence.

Abdulhameed gave members an in-depth analysis context and rationale that informed the creation of NIRSAL, the corporation’s mandate and achievements in Nigeria’s agribusiness space.

He explained that prior to the creation of NIRSAL, financiers were averse to lending to agriculture, citing perceived high risks in the sector, especially in the upstream segment of the agricultural value chain where primary production takes place, often referred to as the “black hole” in agriculture.

He said in response to these concerns and as part of efforts to diversify Nigeria’s economy from crude oil-dependence, the CBN formulated NIRSAL to catalyse the flow of much-needed financing into agriculture by redefining, measuring, re-pricing and sharing agribusiness-related credit risk with financiers.

Abdulhameed said the CBN, in its foresight, established NIRSAL as a public liability company registered under the companies and allied matters act. This gave financial institutions more confidence and ease to do business with NIRSAL as opposed to the limited transactions they could enter into with public sector institutions and the legal complexities therein.

Abdulhameed informed the committee that the agency is built on five broad pillars of risk sharing, insurance, technical assistance, incentives and rating.

“These strategic pillars are geared towards increasing bank lending to the agricultural sector by over 6% in the short to medium term, hence, bridging the gap between the finance and agricultural sectors,” he said.

“Principally, NIRSAL is facilitating finance to agriculture through its Credit Risk Guarantee (CRG). Through the CRG, NIRSAL shares either 30%, 50%, or 75% of agribusiness-related risk with financiers depending on the agricultural value chain segment receiving finance.

“Through the NIRSAL CRG, NIRSAL has attracted investment into agribusiness and guaranteed 697 agribusiness loans worth USD505.9Million, paid NGN1.274Billion Interest Draw Back to 271 obligors, creating over 400,000 direct jobs and impacting over 2,000,000 lives in the process.

“In terms of insurance, NIRSAL has developed and launched the Area Yield Index Insurance (AYII) product and protected up to NGN6.47Billion in revenues of 35,492 farmers over 37,399 hectares of land with NGN122Million paid out in compensation to farmers.”

He said NIRSAL has facilitated the granting of licenses to five insurance companies by the Nigerian Agricultural Insurance Corporation (NAIC) to underwrite index-based agricultural insurance.

He added that NIRSAL has overseen the establishment of risk sharing facility (RSF) models for African countries under the aegis of the African Development Bank (AfDB), and recently, concluded the setup of the Togo Incentive-Based Risk Sharing System for Agricultural Lending (TIRSAL), known locally as Mécanisme Incitatif de Financement Agricole Fondé sur le Partage de Risques (MIFA).

Other African countries have also sought NIRSAL’s guidance on how to set up similar agribusiness risk-sharing sharing models. They include Ghana and Benin among others.

The committee has also tasked NIRSAL on tackling the issue of post-harvest losses by strengthening commodity exchange systems in which farmers can trade their commodities round-the-clock.

TheCable

Post a Comment

Advertise your Business, Event, Campaign and make publication on Boki Blog to reach our over 70,000+ daily readers in Cross River State and Nigeria

Mail us Now Bokiblogonline@gmail.com

About Author

Hi, I,m Pospi Otuson. A Nigerian Blogger, Social Entrepreneur and Convener of the renowned Boki Business Conference. CEO/Founder of Possibility Desk, the largest online consulting platform for possibilities in the world.

Let's Get Connected:- Twitter | Facebook | Google Plus | Linkedin | Pinterest

'; (function() { var dsq = document.createElement('script'); dsq.type = 'text/javascript'; dsq.async = true; dsq.src = '//' + disqus_shortname + '.disqus.com/embed.js'; (document.getElementsByTagName('head')[0] || document.getElementsByTagName('body')[0]).appendChild(dsq); })();