By Collins Nweze
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc has guaranteed N266.97 billion ($648 million) bank loans to different agriculture-focused companies in the last five years.
Speaking during a tour of ADT Russet’s factory in Apapa, Lagos, NIRSAL Managing Director/CEO Aliyu Abdulhameed said the company had also guaranteed N1.15 billion Keystone Bank’s loan to ADT Russet Limited.
He said ADT Russet, a cocoa bean sourcing and exporting company, got NIRSAL’s 50 per cent Credit Risk Guarantee (CRG) to reduce the loan risk on Keystone Bank Limited.
Abdulhameed explained that besides the absorption of a substantial part of its risk exposure in the event of loan delinquency, NIRSAL Plc was also providing efficient monitoring of the project, which aimed at boosting ADT Russet’s export volume to 4,000 metric tonnes per annum.
According to him, by supporting ADT Russet’s operations, NIRSAL Plc is also indirectly creating a stronger market for the many cocoa farmers who supply their inventory.
“We have guaranteed projects worth $648 million, about (N266.97 billion) in the last five years. These are projects that are live under the NIRSAL guarantee. The projects are performing given that the failure rate of these projects is less than one per cent,” he said.
Abdulhameed also explained that beyond cocoa, the NIRSAL operation covers 18 commodities comprising crops, livestock, poultry and fishery sectors.
In each of the commodities, NIRASL covers production, input supply, processing, transport, logistic, warehousing, industrial market, export market and domestic consumer market.
“Every actor in this value chain can approach a bank and NIRSAL, get a guarantee, provided the business makes sense. We can even assist them to perfect the business,” he added.
Abdulhameed said the move was meant to enable Nigeria benefit from the over $67 billion global cocoa market.
The NIRSAL Plc is a $500 million non-bank financial institution and a wholly-owned corporation of the Central Bank of Nigeria (CBN), designed to redefine, dimension, measure, re-price and share agribusiness-related credit risk.
“It was created to stimulate the flow of affordable finance and investments into the agriculture sector by de-risking the agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalizing incentives for agricultural lending through its five strategic pillars namely: risk sharing, insurance, technical assistance, incentives and rating,” he said.
Abdulhameed said the ADT Russet Limited is one of over 748 agribusinesses that are currently benefiting or have benefitted from the NIRSAL CRG.