NIRSAL facilitates N73bn for Agro processing
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc), has facilitated the flow of over ₦73 billion into Nigeria’s Agro Processing industry from various sources.
NIRSAL Managing Director, Aliyu Abdulhameed, disclosed this at a media session on Tuesday in Abuja.
He said these sources include deposit money banks, development financiers, private equity investment firms and other financial institutions.
“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.
He said NIRSAL Plc’s strategic support to Agro Processors which operates within the midstream segment of the AVC creates a profit-driven ecosystem in which farmers in the upstream AVC segment have a reliable market in the form of Agro Processors who offtake farmers’ produce.
“NIRSAL Plc’s 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’s 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’s effective deployment of its Credit Risk Guarantee (CRG) instrument,” he said.
Meanwhile, he explained that the NIRSAL CRG is NIRSAL Plc’s core product used to share agribusiness-related credit risks with commercial banks and financiers by up to 75 per cent.
” 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, 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 per cent of interest paid on NIRSAL CRG-backed agribusiness loans.
” To date, NIRSAL Plc has paid out over ₦1.64 billion, thereby reducing the effective interest rate for borrowers with a good credit history,” he said.
According to him, the injection of finance into the Agric sector through NIRSAL Plc has resulted in broad socio-economic growth.
“Agribusiness owners have been able to expand their operations and increase their staff strength, with NIRSAL CRG beneficiaries attesting to a 20-60 per cent increase in capacity utilization, productivity, number of markets served and sales value,” he said.
NIRSAL Plc’s latest achievement, he said, also coincides with the development of the Nigeria Special Agro-Industrial Processing Zones (SAPZ) Program across the country to which NIRSAL Plc is offering its support.
The NIRSAL boss also made it known that in line with NIRSAL Plc’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.