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NIRSAL boosts cocoa supply chains in Lagos with N1.15bn

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Managing Director, ADT Russet Ltd, Mr. Charles Eteri (left); Managing Director/CEO, NIRSAL Plc, Mr. Aliyu Abdulhameed; and Mr. John Chukwu, Regional Head, Keystone Bank during the NIRSAL-ADT Russet Ltd CRG Project Launch in Lagos.<br />

• ADT Russet Ltd to export 4,000MT yearly
As the world global cocoa market value hits $67 billion, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) has activated its resources to maximise Nigeria’s participation in the raw material supply chains.
 
Hence, NIRSAL has provided 50 per cent Credit Risk Guarantee (CRG) on a working capital facility of N1.15 billion to ADT Russet Limited, a cocoa bean-sourcing and exporting company in Lagos State.
 
Besides the absorption of a substantial part of its risk exposure in the event of loan delinquency, NIRSAL Plc is also providing efficient monitoring of the project, which is aimed at boosting ADT Russet’s export volume to 4,000MT yearly.
 
By supporting ADT Russet’s operations, NIRSAL Plc is also indirectly creating a stronger market for the many cocoa farmers who supply their inventory.
 
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A Special Purpose Vehicle (SPV) that was set up only in December 2019 by Arma Dei Trading Limited, ADT Russet Ltd, has leveraged NIRSAL Plc’s support to ship over 1,600MT of commodities to international markets, surpassing the number of its parent company, which has been in existence for far longer.
 
Speaking during a tour of ADT Russet Ltd’s factory in Apapa, NIRSAL Plc’s Managing Director/CEO, Mr. Aliyu Abdulhameed, said NIRSAL had provided similar support to another cocoa processing and exporting company in the Southwest region, in Akure, Ondo State.
 
He said: “We are happy to yet again demonstrate our willingness and capability to support agro-allied companies across the country to grow their businesses, engage smallholder farmers, and earn foreign exchange for the Nigerian economy.”

ALSO present at the tour of ADT Russet’s facility were the Managing Director of the company, Mr. Charles Eteri, and members of his management team; Mr. John Chukwu, Regional Head, Keystone Bank and his team, as well as staff of NIRSAL Plc’s Project Monitoring, Reporting and Remediation Office (PMRO) in Lagos State who are promoters of the project.
 
Mr. Eteri commended NIRSAL for its unique role in supporting serious-minded business firms, which operations were contributing to Nigeria’s quest for economic growth and diversification.
 
He said that his foray into agro exports had been successful, and the potential for growth owing to NIRSAL Plc’s support are enormous.
 
Speaking for Keystone Bank, Mr. John Chukwu said deposit money banks do not need to be coerced into financing agriculture, insisting that structured value chains and de-risked projects would naturally, and on their own merit, attract any profit-seeking business entity.
 
He added that where there was a strong intention to support national priorities, like in Keystone Bank, de-risked and structured agribusiness projects would become an even more compelling business proposition.
 
The tripartite relationship between NIRSAL Plc, ADT Russet Ltd and Keystone Bank is part of the growing outcomes of NIRSAL Plc’s high-level engagements with Deposit Money Banks, Merchant Banks, Finance Houses, MDAs of government, and local and international Development Finance Institutions (DFIs), wooing them into an agriculture/agribusiness space.
 

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Over the years, the risk management institution has facilitated the flow of more than N150 billion into agriculture from multiple sources, the managing director said.
 
At least, N124 billion of that sum came from commercial banks that leveraged NIRSAL’s Credit Risk Guarantee (CRG) facility in addition to investing in de-risked, structured, and well-monitored projects to make high investment returns.
 
While NIRSAL Plc relies on the high level of control afforded it by its innovative value chain solutions as a safeguard for its risk exposure, the banks rely on same, in addition to the CRG facility for the safety of their financial investments.
 
According to the value chain segments where projects are situated, NIRSAL’s guarantee cover on bank loans ranges from 30 to 75 per cent.
   
Being a major hub of Nigeria’s finance sector, it should be easy, NIRSAL believes, to create a firm handshake between finance and agriculture in the region as an example for the rest of the country.
 
Expectedly, testimonials from NIRSAL’s tentacles in the Southwest are strengthening its push for a more impactful handshake between the sectors countrywide.
 
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