NIRSAL to leverage on research institutes, intellects to mitigate risks in agric business
Plans are underway by the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) to collaborate with research institutes, experts and agencies along the agriculture value chain to mitigate agribusiness related risks.
To isolate the risk elements and create a template to build on those risks, NIRSAL, a Central Bank Cooperation said the insurance industry, themselves, who are the risk absorbers, the institutes and experts, must have a collaborative platform for it to be achieved.
The Managing Director and Chief Executive Officer of NIRSAL, Aliyu Abdulhameed stated this during the April 2018 members’ evening of the Institute of Directors.
He spoke on the theme ‘Nigeria Incentive-Based Risk Sharing System for Agricultural Lending: Breaking New Grounds in Agriculture Financing in Nigeria’.
According to him, NIRSAL ensures both horizontal and vertical integration axes of existing governance structure in agriculture and agribusiness to build and realize the gains of synergies
“Every value chain has horizontal and vertical dimension, what I want to work with the insurance industry for is, on the value chain apart from leveraging ICT, in terms of agro production, we want to create a risk profile and risk template for each value chain horizontally and vertically for each segment. It is that kind of granularity of product creation that I want to work with the insurance industry for.
“This is a high level technical task but we have to leverage on institutes such as university of agriculture, and other experts, working together with NIRSAL and create what composedly go wrong with crop, because what can go wrong is a risk that can be evaluated,” Abdulhameed said.
Speaking on its recent achievements, he said they have investment attracted and loans guaranteed to the tune of $375million, including the financing of 447 tractors while the scheme has also created 360,000 direct employment and has impacted over 1.8million lives.
Earlier, the President and Chairman of governing council, IoD, Ahmed Rufai Mohammed explained that notwithstanding the high income from oil export, agriculture still remains the largest sector in the Nigerian economy, accounting for 22% of the GDP and about 70% of employment opportunities, stressing the increased drive by the present administration to diversify the economy.
The IoD boss noted that the theme, which is more topical in the light of heightened stakeholders’ expectations of outcomes of intervention funds and other initiatives targeted at financing agribusiness over the last ten years submitted that farmers and agribusinesses still require financial support for start-up, expansion, and working capital.
He said there is a huge gap between the supply and demand of agriculture finance that must be addressed.
According to him, discussion on breaking new grounds in agriculture financing is not only necessary for promoting sustainable investment in Agriculture, but also complementary to efforts at enhancing the socio-economic wellbeing of the people and the national economy.