NIRSAL facilitates N146.22bn credit to agric sector

The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has facilitated business deals worth N146.22 billion as of the end of 2021 for those in the agriculture value chain.

Speaking at an interactive session with journalists on Tuesday in Abuja, the Managing Director of  NIRSAL Plc, Mr Aliyu Abdulhameed said his organisation is galvanising organic economic interest in Nigeria’s agriculture sector; to build conditions that enable borrowers and lenders to engage in the creation of new value across the sector.

He said NIRSAL measures its milestones in terms of volumes of finance facilitated, which runs into billions of naira, adding that “some people get the impression that we are lenders.”

He explained: “When we say that NIRSAL Plc has facilitated the flow of over N146 billion into agricultural commodity value chains from commercial banks, we mean that we have brokered deals whose value add up to that figure.”

The MD of NIRSAL noted that banks are very conservative with depositors’ funds, hence have long shied away from lending to agriculture because of their high perception of risks.

He pointed out that the development has necessitated the need for NIRSAL Plc to create conditions that influence a change in perception under a purely commercial logic referred to as fixing value chains.

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Mr Abdulhameed further said that when banks lend, projects succeed, and borrowers payback, our job is done, adding “We at NIRSAL Plc wake up every morning and go to work for the sole purpose of triggering and sustaining this flow”.

The NIRSAL boss posited that the organisation’s innovations in this regard have been well publicised, chiefly, the Agro Geo-Cooperative farming model, which gives primary production a new impetus for attracting finance and investment.

Speaking on NIRSAL mandate, he said that it has birthed the F-AGC Agribusiness Solution Services, a suite of fee-based, largely technological expertise that are set to offer willing buyers in the upstream segment of the agricultural value chain.

According to him, the innovation will provide traceability of funds to financiers and lead to efficiency in the farms.

“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,” he said.

In all NIRSAL’s transactions, Mr Abdulhameed disclosed that the organisation has so far recorded one per cent Non-Performing Loan (NPL), noting that it is within the threshold in the sector.

He said “When we say less than one per cent, you know that non-performing loan largely in the economy is controlled by Central Bank of Nigeria (CBN). The CBN tells the banks to make sure that the non-performing loan level does not exceed a certain percentage of the total loans, but agric being agric sometimes, it is allowed to even have higher in bills but the beautiful thing about NIRSAL is that you could see that we are still below the industry average even for the riskier segment that is why you see less than 1 per cent, and that is why in our name you hear risk.”

He explained that the job of NIRSAL is about risk management, “we spend a lot of our time and resources to make sure that everybody we guarantee is risked managed. Everything that can delay that project and make it lose money whether is human character, biological or physical, whatever it is; we try to risk manage.”

On insurance, he said NIRSAL as a risk mitigator does not exclude any project on its guarantee scheme and that “we put insurance in the process because when we put insurance at least when there is risk the insurance people will take care of part of the risk. What we do in NIRSAL is to tell the insurance industry to create unique products for each segment of the value chain that speaks to their risk.”

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NIRSAL facilitates N146.22bn credit to agric sector