NIRSAL Support to Agro-Processing Industry Hits N73 billion
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), has said it has facilitated the flow of over N73 billion into Nigeria’s Agro Processing industry from various sources.
The Managing Director, NIRSAL, Aliyu Abdulhameed, disclosed at a media parley in Abuja
According to him, the sources of the funds include deposit money banks, development financiers, private equity investment firms and other financial institutions. He noted that the support was part of NIRSAL’s mandate of creating a stronger linkage between segments of Nigeria’s Agricultural Value Chain (AVC) and subsequent AVC-linkage to commercial bank finance.
He Furthermore explained that NIRSAL’s strategic support to Agro Processors that 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 off-take farmers’ produce, add value and satisfy consumer demand in the downstream AVC segment.
“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,” Abdulhameed said.
Also, the NIRSAL boss explained that to date, NIRSAL Plc has paid out over N1.64 billion, thereby reducing the effective interest rate for borrowers with a good credit history, noting that over 4,250 bank officers have been trained on NIRSAL CRG guidelines and efficient Agric lending, leading to an improvement in banks’ disposition towards Agric lending and an increase in bank lending. “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 date, NIRSAL Plc has paid out over N1.64 billion, thereby reducing the effective interest rate for borrowers with a good credit history,” he added.
Also, he noted that NIRSAL Plc’s finance facilitation efforts have generated an additional $2.5 billion worth of economic activity through agricultural products/outputs and other value chain economic activities, created 360,000 direct jobs and positively impacted the lives of 1.8 million Nigerians. The NIRSAL boss hinted that as a result of the success of the firm’s risk-sharing model, commercial banks have pledged a combined $500 million to fund agriculture and agribusiness.
source Agro Nigeria:
