The Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) said it has facilitated the flow of over N73 billion into Nigeria’s agro processing industry to date from various sources.
NIRSAL’s mandate includes creating a strong linkage between segments of Nigeria’s Agricultural Value Chain (AVC) and commercial bank finance.
Aliyu Abdulhameed, managing director of NIRSAL, speaking on Tuesday, at a media briefing in Abuja, restated the commitment of the organisation to its mandate of galvanising organic economic interest in Nigeria’s agriculture sector and boosting conditions that enable borrowers and lenders to engage in the creation of new value across the sector.
“By protecting financiers and investors from possible losses in a credit transaction, NIRSAL plc has built up their confidence to lend to players in the agric sector, a sector once widely considered as a no-go area in finance circles.
“Backed by the NIRSAL CRG, farmer groups and agribusinesses which before the introduction of the NIRSAL CRG, had found it difficult to secure loan approvals from commercial banks, now enjoy smoother approval processes for the loans they require to expand their operations, increase their profits and enhance their livelihoods,” he said.
Speaking further, Abdulhameed disclosed that the company birthed the F-AGC Agribusiness Solution Services with the aim of providing traceability of funds to financiers and lead to efficiency in the farms.
The innovation, according to him, is a suite of fee-based, largely technological expertise that offers willing buyers in the upstream segment of the agricultural value chain.
Read also: Nigeria to sign $3.3bn loan agreement for 10 projects – minister
“In all, financiers, which are largely the banks, remain the first critical market we are labouring to serve. At the other end are farmers and other agripreneurs to whom we are offering our innovations as platforms on which financiers are already standing, ready to do business.
“NIRSAL plc was created to be lean, agile, and efficient in creating economic linkages between the finance and agriculture sectors.
“The Credit Risk Guarantee (CRG) tool, which we deploy to facilitate agricultural lending, comes in the form of a piece of paper. It is only when a project fails and puts a lender’s money in jeopardy that the CRG tool begins to take the shape of money. Even then, we have witnessed less than 1 percent of such scenarios in our entire existence,” he said.
He also noted that NIRSAL’s support comes at a time in which developing economies are increasingly shifting from only producing raw materials to both production and value- addition for increased economic activity, bolstering foreign exchange earnings and widespread social development.
Beneficiaries of NIRSAL’s finance-facilitation, according to him, include pre-upstream, upstream and downstream AVC operators involved in inputs production and supply, mechanisation service provision, primary production and logistics.
He also disclosed that as a result of the company’s risk-sharing model, commercial banks have pledged a combined $500 million to fund agriculture and agribusiness.
