The Managing Director of the Nigeria Incentive-Based Risk Sharing for Agriculture Lending, (NIRSAL), Mr. Aliyu Abdulhameed, has said that the initiative’s support through the Anchor Borrowers Programme of the Central Bank of Nigeria (CBN) to smallholder farmers will increase their income by about N135 billion this year.
Making the forecast at a PULA Insurance workshop held in Abuja, Abdulhameed hinged the projection on the fact that NIRSAL had put in place necessary measures to support about 500,000 smallholder farmers cultivate over 600,000 hectares, with target grain production of about 1.5 million metric tonnes.
The finance expert, who spoke on the theme, ‘Accelerating Growth of Agriculture Insurance In Nigeria – Lessons Learnt and Way Forward’, pointed out that based on current market price of N90,000 per tonne, the smallholder farmers can generate N135 billion from their grain production through the utilization of the credit.
He also promised that the NIRSAL would continue to intervene in key areas of the agricultural sector with a view to boosting private sector funding on a sustainable basis.
Abdulhameed said: “We want to ensure that intervention funds currently being used to finance agriculture are safe and we propose that the CBN will consider the use of this product and future products to insure all its intervention funds in agriculture.”
The NIRSAL is a risk-sharing system initiated by the CBN to improve affordable financing and investments into some agricultural value chains in the country.
It has five key objectives namely, to fix agricultural value chains in order to provide a reliable platform for de-risking agricultural lending; and to mobilize financing for Nigerian agribusiness by using credit guarantees to address the risk of default.
Others are, to provide technical assistance through capacity building across the value chains; to reduce the cost of borrowing by agricultural producers from commercial banks; and to provide technical advice to agribusinesses.