CBN Farmers’ Anchor Borrowers Programme: NISRAL Leaps to New Heights, Creates 1.2m Indirect Jobs

Posted by African Examiner Business News, Featured, Latest Headlines Tuesday, October 15th, 2019

Photo: CBN Governor, Godwin Emefiele

(AFRICAN EXAMINER) – The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has recorded some giant strides in creating more than 1.25 million indirect jobs in the nation’s agribusiness.

Also, 250,000 direct jobs for farmers have been created through the NIRSAL window of the Central Bank of Nigeria’s Anchor Borrowers’ Programme with over N500 billion disbursed so far to the farmers across the country.

NIRSAL specialises in Value Chain Fixing, Agribusiness Project Development, Finance Facilitation and Agricultural Risk Management.

The NIRSAL Interest Drawback Scheme is designed to reward diligent borrowers’ behaviour through discretionary rebates of up to 40% of interest paid, thereby reducing the effective interest rate for borrowers with a good credit history.

Rebate payments apply only to pre-approved CRG transactions and are made every 90 days subject to compliance with the loan’s underlying conditions and timely repayments of Principal and Interest during the review period.

And within five days of receipt of loan term sheets from the CBN, NIRSAL disburses to the farmer-applicants.

NIRSAL restated that as a CBN-owned company, it would continue to ensure that Nigerian farmers get timely and adequate support in order to meet the objectives of the Muhammadu Buhari administration-CBN Anchor Borrowers’ Programme.

“We observe the highest ethical and professional standards as all funds from the CBN are disbursed directly into farmers’ accounts and farmers can access such funds once drawdown conditions have been met.

“As an agricultural finance risk management organization, we are mindful of the various risks associated with yield and repayment capacity of the farmers.

“That is why we have launched the `Area Yield Index Insurance’ – an insurance product tailor-made for farmers and established the Project Monitoring and Remediation Offices (PMROs) nationwide.

“It is working closely with farmers throughout the farming cycle to ensure success of its projects as well as protecting the interest of all verified and bonafide farmers.

“These additional services are provided to farmers at NIRSAL’s own cost.

“No off-taker will be allowed to hold farmers to ransom as existing clauses of signed tripartite agreements with various off-takers will ensure that farmers will get value for their produce in addition to sanctions for non-performance by off-takers,’’ it said.

Meanwhile, Gov. Godwin Obaseki of Edo has scored NISRAL high in its drive to boost lending and agribusiness in the country.

He was confident of an imminent boost in employment of youths as NISRAL flagged off its market-led and technology-driven system of primary agriculture production in the state tagged, FAM-SMART.

A 140-hectare pilot project has been established in the Ossiomo Industrial Park in the state.

FAM-SMART stands for: “Farm Aggregation Model for Smallholder Agriculture based on Technology”. It is a system of Primary Production Agriculture designed by NIRSAL for Smallholder Farmers that relies on 3 principles: Aggregation, Structured group dynamic and Proportionate cost and profit sharing.

Reeling out the benefits of the unique model, the Managing Director/CEO of NIRSAL, Mr Aliyu Abdulhameed said through FAM-SMART, the agency packages contiguous farmlands of between 100 to 250 hectares, operated by about 100 to 250 smallholder farmers with financial identities and Virtual Asset Titles (VAsT) are created using Geospatial Mapping technology.

The centralized input supplies, mechanization and pre-agreed off-take terms with the markets for pre-specified quality and quantity of products all supported by structured dynamics.

The FAM-SMART model results in achieving economies of scale for primary production agriculture with optimized output and increased financial returns to smallholder farmers and yet without the drudgery and subsistence yield regimes normally associated with smallholder African agriculture”.

Abdulhameed added that FAM-SMART represents an exceptional opportunity for smart investors

He said: “With the creation of sizable financing tickets, with high yield and thus high cash flow assured, clear funds visibility and control within an almost cashless transaction system that is moreover supported by NIRSAL’s credit risk guarantees.

“The FAM-SMART model not only addresses previous risk perceptions and aversion of financiers and investors to primary production agriculture but, conversely, makes primary production smallholder agriculture very attractive to financiers and investor.

“For instance, on a very conservative yield estimate of 5 tons per hectare (on a yield potential of 10 tons per hectare) for maize under FAM-SMART) produced by an initial number of 1000 geo-cooperatives (out of 16,000 planned nationwide) producing a gross output of 1,250,000 metric tons of grain, gross revenues of N125 billion.