NIRSAL facilitates N102b to stimulate agric, creates 400,000 jobs

The Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has confirmed that it has facilitated over N102 billion as loans from commercial banks since its inception across the various agricultural value chains in the country.

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.

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 strategic pillars namely: Risk Sharing, Innovative Insurance Technical Assistance, Incentive Mechanism, and Rating.

Speaking with newsmen in Abuja, Aliyu Abdulhameed, Managing Director/Chief Executive Officer (CEO) of NIRSAL, said the company 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.

He said NIRSAL had within a short period of time achieved, among others, the Development of Area Yield Index Insurance for the CBN’s Anchor Borrowers’ Programme.

Abdulhameed said in a bid to further de-risk Nigeria’s agriculture industry for investors and financiers, NIRSAL as the Agricultural Finance Risk Management Corporation of the CBN had dimensioned the entire agricultural value -hain into four segments: The Pre-upstream, Upstream, Midstream, and Downstream.

He disclosed that NIRSAL had developed and deployed appropriate de-risking strategies that speak to the entire risk universe as they affect both the agricultural and agriculture finance value chains.

Since its establishment in 2016, he said NIRSAL had paid out N4.6 billion as claims to providers of finance (Deposit Money Banks) on Credit Risk Guarantees that crystallised. An additional N1.2 billion, he said, had been paid to prudent borrowers as interest drawbacks who have found their cost of funds and businesses boosted as a result.

NIRSAL’s goal, according to Abdulhameed, 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.

NIRSAL is currently leading a consortium of agricultural insurance underwriters to strategically transition their product focus from indemnity-based insurance to Area Yield Index, Revenue Index, Hybrid Index and finally to the NIRSAL Comprehensive Index Insurance product. This suite of innovative products does not only provide compensation to farmers based on the cost incurred but also covers projected earnings.