- NIRSAL Facilitates N85.5bn from Banks to Agric Sector
The Nigerian Incentive-Based Risk Sharing System for Agricultural Lending says it has facilitated a total amount of N85.5bn from Deposit Money Banks for the agricultural sector since its incorporation in 2013.
The Managing Director, NIRSAL, Aliyu Abdulhameed, gave this figure on Monday in a statement issued in Abuja.
NIRSAL was created by the CBN to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agribusiness finance value chain, fixing agricultural value chains, building long-term capacity and institutionalising incentives for agricultural lending.
He said the N85.5bn was not facilitated for primary production segment alone, but across all four segments of the agricultural value chain.
Giving a breakdown of the amount, he said that a total of N45.6bn went to the pre-upstream segment of the agricultural value chain primarily for mechanisation and agricultural inputs such as fertiliser, seeds and agrochemicals required before primary production.
He said over N19bn went into the upstream, which is mainly the primary production of maize, cassava, soybeans, rice, cotton and poultry, among other commodities.
He said the balance of N20.9bn went into the midstream segment of the agricultural value chain used predominantly in the processing of cassava chips, rice milling, cotton, oil palm, and cocoa.
Abdulhameed said that to date, NIRSAL had paid a total amount of N4.6bn as claims on credit risk guarantees that crystallised to DMBs. In addition, he said that NIRSAL had also paid about N1bn as interest drawback to borrowers.
He said, “Through NIRSAL’s facilitation, a total of 373,752 direct jobs have been created and 1.8 million indirect jobs 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.”
In the area of agricultural insurance, the MD said NIRSAL’s goal was to expand insurance uptake by primary producers from 0.5 million to 3.8 million by 2026.
He said so far, 24,666 farmers cultivating 20,062 hectares have used the NIRSAL Area Yield Insurance Index product to protect a total harvest value of N4.77bn. He said insured farmers who suffered low area yields during the 2017 wet season had received appropriate compensation.