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The Nigerian Incentive-Based Risk Sharing System for Agricultural Lending, (NIRSAL), says it has facilitated over N102 billion as loans from commercial banks to businesses across the various agricultural value chains in its three years of operation.
Managing Director/CEO of NIRSAL, Mr. Aliyu Abdulhameed, who spoke during a media parley in Abuja on Wednesday, said that the company has also paid out a total of N4.6 billion as claims to providers of finance on credit risk guarantees that crystallised.
In addition, he said N1.2 billion was paid to prudent borrowers as interest drawbacks who have found their cost of funds and businesses boosted as a result.
‘‘It is important to state that through NIRSAL’s facilitation, over 400,000 jobs have been created and two million lives positively impacted in the pre-upstream, upstream, midstream and downstream segments of the agricultural value chain, specifically in the areas of mechanisation, input supply, primary production and processing’’.
NIRSAL Plc, a wholly-owned corporation of the Central Bank of Nigeria (CBN), is a $500 million non-bank financial institution specifically designed to redefine, measure, re-price and share agribusiness-related credit risk. This, it does through fixing of agricultural value chains, building long-term capacity, and institutionalising incentives for agricultural lending, leveraging its five strategic pillars namely: risk sharing, innovative insurance technical assistance, incentive mechanism and rating.
NIRSAL has collaborated with NAICOM and NAIC to provide innovative and index-based insurance to protect investments in the upstream segment of the agricultural value chain, particularly those of smallholder farmers.
Following the experience of the developed product, NIRSAL is in the final stage of developing the proprietary NIRSAL Comprehensive Index Insurance (NCII) product.
In this regard, NIRSAL is leading a consortium of Agricultural Insurance underwriters to strategically transit their product focus from indemnity-based insurance to area yield index, revenue index, hybrid index and finally to the NIRSAL comprehensive index insurance product.
Abdulhameed added that his company developed hybrid index product with Royal Exchange Plc and submitted to National Insurance Commission (NAICOM) for approval and signed agreement with PETKUS Technologie GMBH on new technologies for seed and grain processing in Nigeria while implementing plan for the NIRSAL Student Knowledge Enterprise and Practice Program (NSKEP) which was ongoing and will provide exposure to 400-500 level students in agribusiness disciplines to gain field experience and pursue entrepreneurship in agribusiness.
“As at December 2019, a total of 35,160 farmers cultivating 36,347 hectares have used the NIRSAL Area Yield Insurance Index product to protect a total harvest value of over N4.77 billion. Insured farmers who suffered low area yields during the 2019 wet season to receive appropriate compensation.”
