The Chief Executive Officer (CEO) of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc, Aliyu Abdulhameed said it has accelerated over ₦73 billion into Nigeria’s agro-processing industry.
Abdulhameed made this known on Tuesday at a media session in Abuja.
“This is in carrying out our mandate of creating a stronger linkage between segments of Nigeria’s agricultural value chain (AVC) and subsequent AVC-linkage to commercial bank finance,” he said.
“NIRSAL Plc support comes at a time when 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.
“Other beneficiaries of NIRSAL Plc finance-facilitation include pre-upstream, upstream and downstream AVC operators involved in Inputs Production and Supply, Mechanization Service Provision, Primary Production, and Logistics.
“This feat, which has made a notable contribution to the Federal Government’s agric promotion drive, was achieved through NIRSAL Plc effective deployment of its Credit Risk Guarantee (CRG) instrument.”
Abdulhameed further said the NIRSAL CRG is a core product of the agency used to share agribusiness-related credit risks with commercial banks and financiers by up to 75 percent.
He added that the finance into the agric sector through NIRSAL Plc has resulted in broad socio-economic growth.
“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,” he added.
“Backed by the NIRSAL CRG, farmer groups and agribusinesses which before the introduction of the NIRSAL CRG, 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.
“To provide further support to Nigeria’s farmers and agribusinesses, NIRSAL Plc, through its Interest Drawback (IDB) scheme, goes the extra mile to reward diligent borrower behaviour through discretionary rebates of up to 40 percent of the interest paid on NIRSAL CRG-backed agribusiness loans.
“To date, NIRSAL Plc has paid out over N1.64 billion, thereby reducing the effective interest rate for borrowers with a good credit history.
“Agribusiness owners have been able to expand their operations and increase their staff strength, with NIRSAL CRG beneficiaries attesting to a 20 to 60 percent increase in capacity utilisation, productivity, number of markets served, and sales value.”
SAPZ
He also said that NIRSAL Plc’s latest achievement also overlaps with the development of the Nigeria Special Agro-Industrial Processing Zones (SAPZ) Program across the country to which NIRSAL Plc is offering its support.
Abdulhameed also made it known that in line with the agency’s finance-facilitation mandate, SAPZ would mobilise private sector investment into the selected zones to enhance productivity and integrate production, processing, and marketing of agric commodities.
