In its quest to grow the agriculture sector and position it as a major revenue earner, the Nigerian Incentive-Based Risk Sharing System for Agriculture Lending (NIRSAL) says it has has guaranteed over N85.5 billion in agricultural loans along all segments of the agricultural value chain since its inception in 2011.
The breakdown shows pre-upstream segment at N45.6 billion, upstream segment at over N19 billion, and midstream segment at N20.9 billion, with activities in aforementioned segments covering mechanization, agricultural inputs, primary production, and processing.
The agency added that about N1.76 billion of the Credit Risk Guarantees (CRGs) issued were in mechanization.
The Managing Director of NIRSAL, Mr Abdulhameed Aliyu, made the revelation in a statement while reacting to what he described as recent inaccurate and distorted media report on NIRSAL’s mechanization programme, especially on its engagements with the Tractor Owners and Operators Association (TOOAN).
According to him, NIRSAL was approached by First City Monument Bank (FCMB) in July 2018 to provide CRG cover for a N500 million loan for the acquisition of tractors by the Oyo State chapter of TOOAN, which was approved by TOOAN’s national body via the Bank of Industry (BOI).
“Upon due consideration and based on several factors including NIRSAL’s negative experience with another state chapter of TOOAN, NIRSAL’s credit committee determined that the TOOAN Oyo State chapter’s application was “Outside of NIRSAL’s Risk Acceptance Criteria”.
“This was not a casual decision but was based on rigorous analysis of the application. NIRSAL follows a careful risk assessment process to decide loans that are eligible for its CRG cover and would never decline any application without a valid reason.
“The rejection of a particular application does not preclude accepting future applications that meet the relevant requirements.
“Contrary to the wrong statements attributed to an individual stakeholder whom NIRSAL has not had any official contact with, the agency remains committed to working with all serious partners on progressing impactful initiatives in the mechanization value chain as well as other value chains in the agricultural sector,” Aliyu explained.