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Tag: NIRSAL

  • NIRSAL disburses N66.36b in four years

    The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) has facilitated the disbursement of about N66.36 billion since 2013, when it started operation, the Chief Executive Officer, Aliyu Hameed, has said.

    He disclosed this at the Nigeria Agribusiness Group (NABG) 2017 Conference and Agriculture Expo, held yesterday in Abuja.

    Hammed said the institution, which is solely owned by the Central Bank of Nigeria (CBN), was setup to ease risk of credit lending to farmers, adding that despite the agricultural potential in the country, capital was a major challenge.

    He disclosed that Nigerians cannot eat potential but needed capital, which comprises finance, capital equipment, human capital as well as technology, to really drive the sector and achieve food sufficiency.

    His words: “In the last three and half years up to the moment, we have been able to catalase facilitate up to N66.36b in additional lending to the entire value-chain in agriculture and we paid up to N940 million directly as interest drawback to the borrowers account.

    “The interest drawback is a key support component. If you borrow money and you are able to payback as at when due, in the NIRSAL model, you can come back every three months and we give you up to 40 per cent rebate.”

    Hameed restated NIRSAL support to the rural farmers, mechanization suppliers and other members of the NABG to process their logistics and facilitate both local and foreign markets.

    He assured bankers and other investors of his commitment to de-risk investments in the agricultural value-chain.

    “Whatever happens to their money based on the level of guarantee we give, such an investor and financiers can come back to us and say there is a loss. We then pay you back whatever you lose based on our agreement so it will enable you reinvest,” he added.

    Earlier, President of the NABG, Alhaji Sani Dangote described the conference as opportunity to discuss issues affecting the sector and provide workable solutions, as well as develop new innovations that could boost agricultural productivity.

    He urged the stakeholders to put a stop to being over-dependent on the Federal Government, stressing that the private sector remains vital to repositioning the sector while federal government is expected to create workable environment.

    “The government should listen to us and should come up with policies that will develop the sector. We should be able to influence their ideas to see the reality because we are the actual participants. We are the ones to get it done, government is just the facilitator.”

     

     

    He appealed to stakeholders to develop innovative ideas that would make agriculture interesting to youths.

    Describing 70 per cent of the population as youths, Dangote emphasized need to engage them in agro-allied activities. He agriculture should be treated as a serious business rather than a development programme.

    In his keynote address, Chief Executive of Dangote Groups, Chief Aliko Dangote, urged the federal government to focus on agriculture to achieve Nigeria’s food need.

    He decried situations where the nation remained net importer of food despite the potentials to locally grow those foods imported and still do exports.

    Dangote, who was represented by the Group’s Executive Director, Stakeholders Management and Corporate Communications, Mansur Ahmed, identified land acquisition as one of the major challenges confronting the sector.

    He listed others to include insecurity, poor market structure, finance, poor access to better farm inputs such as seeds, fertilisers etc.

    He urged the State Governments to reciprocate government seriousness on the agriculture sector to achieve holistic growth in the country.

    Other personalities present were Director General, Federal Institute of Industrial Research (FIIRO), Prof. Mrs. Gloria Elemo, Deputy Regional Economic Counselor, Mr. Francis Widmer.

     

     

  • NIRSAL, Stanbic IBTC sign N50b agric financing pact

    The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and Stanbic IBTC Bank have signed a N50 billion Memorandum of Understanding (MOU), for agricultural finance scheme.

    The partnership will cover NIRSAL supported projects in livestock, crops, mechanisation, logistics and poultry. Both organisations are in partnership for the 2017, 2018 dry and wet season.

    The Managing Director, NIRSAL Aliyu Abdulhammeed disclosed this at the launch of the N50 billion NIRSAL, Stanbic IBTC agriculture finance scheme in Abuja.

    He said the project was the continuation of its effort to boast agricultural productivity and modernisation by facilitating increased bank lending to the sector.

    He said: “STanbic IBTC has committed an initial N50 billion for the takeoff of the scheme. The amount is to be expanded gradually as milestones are achieved. The first phase of the scheme is projected to create over 92,000 direct jobs, impact about 200,000 lives boasts incomes of rural farmers and compliments government, s efforts to drive inclusive economic growth through agriculture.

    “It will also lead to the cultivation of an additional 11.195 hectares of arable land, increase in the national food output by up to 50, 580mtin yeild and add N3.87 billion value addition. Under the terms of the partnership, NIRSAL is to provide credit guarantee to cover up to 75 per cent of Stanbic IBTC loans to bankable agricultural projects using its $300 million risk sharing facilities.

    “The partnership is in line with NIRSAL mandate to attract private sector finance to agriculture. This partnership marks the start of NIRSAL’s long term collaboration with Stanbic IBTC to ensure that commercial agriculture is entrenched and made a main stream occupation.

    “It is testament to our shared vision for agriculture as a profitable enterprise and a key driver of the Nigerian economy. We are committed to providing Stanbic IBTC with the cover to lend to agriculture and are happy that its management has agreed to partner with us on this project.

    “NIRSAL interventions must be understood within the context of the broad economic policies of this administration. NIRSAL as a policy tool of the Central Bank with the mandate to de risk agriculture and give banks the comfort to lend more to the sector by collaborating with financial institutions such as Stanbic IBTC to drive growth in the agriculture sector as part of its institutional contribution to achieving the objective of the economic recovery growth plan.

    The M.D Stanbic IBTC Demola Segunle said this partnership is the march towards diversification, the Nigerian economy he said is diversified but the government revenue is concentrated on oil and gas. We came up with a productive programme of N10billion to turn agric chain to something that can generate revenue for the country. We test every agric project we embark on for legibility. Our risk criteria has to align with that of NIRSAL. This is a long term partnership for both organisation.

  • BoI, NIRSAL sign agro-lending pact

    The Bank of Industry (BoI) has signed a Memorandum of Understanding (MoU) with the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) on risk-free agro-lending.

    The partnership will enable both institutions achieve more sustainable lending that would boost the agric sector,  BoI Managing Director, Waheed Olagunju, said.

    He said apart from expanding lending windows to players in the sector, the MoU was designed to enhance development in the  agricultural sector.

    He also spoke on the need to harness potentials in the agric sector in the interest of the economy.

    While canvassing for backward integration of huge budgets on food importation, Olagunju said internal food security can be achieved and sustained with promotion of massive local farming.

    “Under the MoU, the arrangement is such that the Bank of Industry lending will guarantee up to 75 per cent of the loans, we will also be doing some primary production that would support primary producers who also go into processing and value addition.

    “We will encourage more of that and  also support those who want to package their products as well. We are talking about moving the produce from the farm to the table which means, primary production, value addition and processing, packaging, distribution and marketing and retailing.

    “As we all know, the multiplier effect per unit of investment is the highest in the agricultural space compared with other sectors and that is the only way we can achieve inclusive growth”.

    “In the first half of this decade, Nigeria economy was ranked among the 10 fastest growing in the world. At an average of 7.7 per annum, but it was growth without jobs because it was non inclusive. That was growth driven by oil which is less labour intensive.

    “Most of the exploration activities take place on the high sea and a lot of foreign expertise is involved but in agriculture this is our own backyard. This is what we own. All the local governments have raw materials, agricultural and solid minerals to which value can be added”.

  • NIRSAL praised for improving agric lending

    The Nigerian Incentive Based Risk Sharing for Agricultural Lending (NIRSAL) has been commended for enabling significant increase in lending to agriculture by the financial sector.

    In a statement, the body’s Coordinator, Research and Strategy,  Bello Abdullahi Abba,  said, “NIRSAL earned the commendation at the recently concluded 2016 African Green Revolution Forum (AGRF) in Nairobi Kenya where Nigeria was cited as a country that has successfully developed a National Risk Sharing Facility for banks to lend to agriculture.”

    He said Nigeria through NIRSAL, “witnessed a 600 per cent increase in lending by banks to the agriculture sector, rising from 0.7 per cent of total bank lending to Five per cent within the last four years, adding that the development has led to many banks establishing their own specialised agricultural lending desks.

    NIRSAL Plc. is a $500 million (about N100 billion) Public Private initiative, wholly owned by the Central Bank of Nigeria as a licensed financial institution designed to appropriately define, price and share agribusiness related credit risk, with a mandate to increase the flow of finance to commercial agriculture by de-risking and fixing the agricultural value chain.

    The Sixth AGRF brought together Heads of States and governments, farmer organisations, business leaders and captains of industry, eminent thought leaders, development partners, researchers, finance & investment leads to share their insights on how to create, align and leverage financial, technical, policy and market-expanding resources to develop game-changing and inclusive agribusiness models for Africa.

    Speakers at the event included Kenya’s President Uhuru Kenyatta; African Development Bank; Dr. Akinwumi Adesina, Vice President, AGCO; Dr. Rob Smith, Svein Tore Holsether, YARA President and CEO; Mr. Strive Masiyiwa and Rwanda’s President, Paul Kagame.

     

  • Fed Govt to CBN: Cut farmers’ interest rate to five per cent

    Fed Govt to CBN: Cut farmers’ interest rate to five per cent

    The Federal Government has instructed the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) of the Central Bank of Nigeria (CBN), to do everything possible to cut interest rate on loans to farmers to five per cent.

    The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who spoke yesterday during the National Workshop on New Agricultural Policy for the sector, said agriculture cannot thrive if lending remains at 25 per cent.

    Ogbeh promised to impose financial sanction on any bank that fails to comply with the directive.

    He said: “Just this morning, I talked to key officials of NIRSAL group in the CBN. We have to bring interest rate to five per cent.

    “How we do it and how the financial institution will work to cope with it (will be worked out), we have to impose serious financial penalties on defaulters otherwise, we will not survive. There is no point pretending we are going to make it in spite of those circumstances.”

    He said Nigeria banks remained one of the financial institutions in Africa that offer outrageous interest rate to local farmers.

    “Even if we acquire competence and capacity, how can we deal with issues of near impossible interest rates in agriculture? There is no country on earth outside Africa where banks demands 25, 18 even nine per cent for agriculture borrowing.

    “Those interest rates, as man, I assure you as a man who has been in this business since the age of seven, you cannot make profit in agriculture. Is there something rest of the world has done that we have failed to do? Sometimes some of the reforms we have carried out in the past, especially fiscal and monetary policies have done terrible damage to this country’s progress.”

    He said there was a time in the past when when the president announced a budget and fixed the lending rates and also informed banks how much they have to lend to the public sector, lamenting that the practice has been jettisoned.

    Chief Ogbeh sought subsidy for the sector as being practiced in other developed countries, adding that the nation has potential to feed its people.

    He said: “There are people complaining about CBN policy on import restriction. We have no business importing rice, sugar, milk, toothpick, bananas, strawberry, pepper. For God sake, what kind of people are we?”

    According to him, Nigeria has 10 per cent of global arable land for cultivation, yet the people relish importation, thereby strengthening other economies and denying youths of jobs, causing crisis.

    He stated that if the 100 million young people in the country, who are predominantly below age 50 could be engaged, they would transform the sector.

    He disclosed that a potential cure has been discovered but needed to be researched upon at the agric research institute to confirm its relevance to local needs.

    “We have a big threat in the poultry industry to bird flu. In the last two months, about 6 million chickens have died. I lost some on my farm as well and I have been calling friends. Just yesterday, I received a text from Egypt and they inform me that have found a vaccine they inject the chicken. We will not immediately rush in and bring in the vaccines, we will take it to our research institutes, take a look and see if it can fit into our needs,” he added.

  • NIRSAL gets MD

    Central Bank of Nigeria (CBN) Governor Godwin I. Emefiele, has approved the appointment of Aliyu Abbati Abdulhameed as substantive Managing Director and Babajide Arowosafe as Executive Director (Technical) of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).

    Abdulhameed holds a B.Sc. in Agricultural Economics and Rural Sociology from Ahmadu Bello University, Zaria and a Masters Degree in Public Administration with specialization in Public Policy. He also holds an Executive Masters Certificate in Project Management from the Project Management College (UK). He has over 22 years experience in Corporate Agribusiness and in the field of Agricultural Finance and Risk management. Mr. Abdulhameed is currently an Executive Team Member of NIRSAL PLC.

    Arowosafe has a first degree in Agriculture and a Masters in Agricultural Policy and Administration. He has wide-ranging experience in agriculture and micro-enterprises having worked in these fields for both the World Bank and the United Nations. Most recently, Mr. Arowosafe was the Commissioner for Agriculture& Natural Resources in Ekiti State.

  • Fed Govt eyes 10 per cent agric credit by 2016

    Fed Govt eyes 10 per cent agric credit by 2016

    The Federal Government plans to double agriculture’s share of banks’ credit to 10 per cent in two years as it seeks to cut food imports, Agriculture Minister Akinwunmi Adesina has said.

    “We made a fundamental shift that agriculture is not a developmental activity, agriculture is a business. And so it shifted the mind-set of the banks. It’s a new agriculture sector in which they can actually invest money and make money,” Adesina said in a report.

    Loans to agriculture as a share of total credit rose to N320 billion ($2 billion), or five per cent, at the end of last year from less than one per cent in 2011, Adesina said.

    He said the Agriculture Ministry is partnering with the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL), a unit of the Central Bank of Nigeria (CBN), to provide credit guarantees to enable banks lend to farmers.

    Nigeria, he said, is trying to reverse decades of neglect of its farming industry and push agriculture as its “new frontier for growth” because it can no longer depend on oil to drive its economy.

    The government’s efforts to boost food supply by 20 million metric tons from 2011 to 2015 has seen the country’s food import bill drop by more than half to $5 billion from $11 billion two years ago, Adesina said.

    The NIRSAL initiative, which is a brainchild of the Central Bank of Nigeria, the Bankers’ Committee and the Federal Ministry of Agriculture & Rural Development (FMARD), seeks to create incentives and catalyse processes to encourage the growth of formal credit, direct and indirect, for the agriculture value chain, as a mechanism for driving wealth creation among value chain participants.

    According to the apex bank, NIRSAL is also expected to be a catalyst for innovative risk management strategies, long-term financing for agribusiness and significant job creation by new entrepreneurs.

  • N60b credit for agro-dealers coming

    N60b credit for agro-dealers coming

    The Federal Government through the Federal Ministry of Agriculture and Rural Development and the Central Bank of Nigeria (CBN), have launched the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending(NIRSAL) initiative to provide N60 billion credit for agro-dealers at nine per cent interest rate.

    The Permanent secretary, Federal Ministry of Agriculture and Rural Development, Mrs Ibukun Olusote, said this yesterday at the Stakeholders meeting of Southern states on the take-off of the implementation of Growth Enhancement Support (GES) Scheme held at Wallan Hotels, Ibadan.

    She said the loans would allow the small scale input retailers to have access to finance to stock up on seeds and fertilisers across the country.

    She said President Goodluck Jonathan has also approved N15 billion to recapitalise the Bank of Agriculture at less than 10 per cent interest rate for farmers and agribusiness practitioners.

    Mrs. Olusote said the GES scheme is a major milestone in the government’s attempt to modernise agriculture and ensure that Nigerian farmers benefit from subsidised fertiliser, seeds and tractors.

    “As you are all aware indirect targeting of farmers made it easy to divert funds because subsidised seeds, fertilizsers and other equipment are diverted to open market and illegally sold at huge profits. As a result, tens of billions of naira were spent every year to reach farmers with agricultural inputs but the level of utilisation of improved seed and fertilizers remained very low.

    “To ensure that only genuine farmers got the subsidised seeds and fertilisers, we put in place the first ever database of farmers in the history of Nigeria. In 2012, we started with the registration of 4.2 million farmers and will increase this year to five million farmers,” she said, adding that within 120 days of the launch of the GES, over 1.2 million farmers successfully redeemed their seeds and fertilisers, using the electronic wallet system.

    Also speaking, the Oyo State Commissioner of Agriculture and Rural Development, Peter Odetomi, said no fewer than 76,082 farmers were validated out of 78,000 that registered for the GES scheme.

    He said only 16,466 farmers benefited from the system as a result of initial problems encountered on e-wallet operations and delays in supplies of agro-inputs to agro-dealers, urging that the cellulant and the e-wallet consultant for the scheme should appoint adequate staff for each geo-political zone in order to decentralise their operations and have resident offices in the states.

    Odetomi said the state is giving farm settlements a facelift, opening new ones and also planning to rebrand the name to attract the youths to agriculture in a businesslike manner.