Andy Esiet, Calabar
Poised to boost agriculture production in Nigeria, the Nigeria Incentive – Based Risk Sharing Systems for Agricultural Lending Plc (NIRSAL Plc), has so far facilitated over N128 billion for agriculture and agribusiness across the country since its inception 10 years ago.
This was contained in a statement by the Head, Corporate Communications, Anne Ihugba made available to some newsmen after the launch of the Gbagolo Integrated Farms Limited and TOAJ Nigeria Limited working capital boost, at weekend at Ikot Akwa Edem Umo in Akpabuyo Local Government Area of Cross River State.
The Managing Director of NIRSAL Plc; Mr. Aliyu Abdulhameed in the statement said, “this huge investment translates to the creation of jobs, driving the growth of rural economies, and positively impacting Nigerian lives”.
He stated that the latest in the list of over 800 business beneficiaries across the country are the Gbagolo Integrated Farms Limited and TOAJ Nigeria Limited, poultry and cocoa value chains in Cross River state that have received N232 million, sourced from Union and Sterling Banks for poultry production and cocoa export in Cross River for the much-needed boost that is expected to generate significant gains for the local and national economies. “This follows the issuance of a 50% Credit Risk Guarantee (CRG) and 20% Interest Drawback (IDB) by the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) on the respective loans of Gbagolo Integrated Farms Limited – a livestock producer and TOAJ Nigeria Limited – a cocoa dealer”.
He disclosed that a few weeks ago, NIRSAL Plc supported ADT Russet Ltd in Lagos with a 50% credit guarantee on a N1.15 billion facility to source and export cocoa beans.
Leveraging on its CRG – an instrument that NIRSAL Plc utilizes to share agribusiness risks with financiers, Abdulhameed said “NIRSAL Plc facilitated the approval and disbursement of N81.8 million and N150 million from Union Bank Plc and Sterling Bank Plc respectively (and) while Gbagolo Integrated Farms Limited will use its N81.8 million term loan to finance the purchase of 25,000 Point of lay birds, 25,000 capacity battery cages and feeding compliments, TOAJ Nigeria Limited will channel its N150 million export/trade finance facility towards the sourcing and purchase of cocoa for export.
“The injection of these finances into the poultry and cocoa value chains in Cross River State will create a positive knock-on effect for players along each segment of both value chains and the agribusinesses’ host communities at large. Specifically, the purchase of 25,000 Point of Lay birds by Gbagolo Integrated Farms Limited will impact poultry feeds sellers and other inputs suppliers in the pre-upstream value chain segment; producers/sellers of Point of Lay birds in the upstream segment, and consumers of eggs and spent layers in the downstream segment”.
Meanwhile, TOAJ Nigeria Limited’s facility will support the thousands of farmers who supply its inventory by providing them with a secure, sustainable, and guaranteed off take market. Furthermore, the export of cocoa will increase Nigeria’s stake in the global cocoa market and boost the country’s foreign exchange earnings.
Speaking during the official launch Abdulhameed, noted that both projects are testaments to the fact that NIRSAL Plc in its bid to realize its vision of “transforming the economy, delivering inclusive growth and positively impacting the lives of Nigerians” supports all sizes of businesses, whether small, medium or large across the length and breadth of the country.
Abdulhameed said as a guarantor, “NIRSAL Plc intervention positively impacts both the lender and the borrower, as well as the overall economy, implying that the lender invests safely and earns competitive returns; the borrower’s capacity utilization and productivity is increased, and the economy reaps the benefits of the backward integration occasioned by increased local production at the expense of importation of essential goods.
He concluded by urging all agricultural value chain stakeholders in the South-South region and the entire country to leverage NIRSAL’s CRG as the collateral required for getting commercial bank financing for their agribusinesses, no matter their size or location.
In his speech, the Managing Director of Gbagolo Integrated Farms Limited Mr. Vincent Egbona revealed that it would have been difficult to service the loan they received from Union Bank if not for NIRSAL’s Interest Drawback (IDB) scheme. The company’s poultry department, which received the credit support, has 60,000 birds and runs an on-farm feed mill with four tons capacity mixer per hour and decried the high cost of raw materials and othr agricultural inputs in the country.
On his part, TOAJ Nigeria Limited, the Managing Director, Mr. Taiwo Sunday, said NIRSAL’s support has helped the company to acquire a 5,000 MT-capacity warehouse in Osogbo, the Osun State capital as the company had been expanding its frontiers to the South-West for the purpose of export and, with NIRSAL’s support, it can now engage more farmers, procure more cocoa, and employ more staff.
Union Bank Plc’s Area Business Executive, Mr. Peter Akpaudoh, who was also present at the launch event, stressed the value in the suite of NIRSAL’s value offerings. Beyond the credit risk guarantee provided to Gbagolo Farms, NIRSAL PLC is also offering technical assistance and round-the-clock project monitoring, a package that really makes lending to agriculture and agribusiness easy.
Indeed, NIRSAL’s value offerings cut across value chains and value chain segments. While credit guarantees, technical assistance, and project monitoring sweeten lending to businesses in the midstream segment of commodity value chains, the innovations and structuring introduced by NIRSAL in the upstream segment also impact the success of projects all through the value chain. Hence, for banks and other commercial lenders, the incentives are too good to resist.
Sterling Bank Plc, financiers of TOAJ Nigeria Limited, who also had a representative at the launch event, the Business Executive, Commercial, South-East, Mr. Uchenna Agbowo, said that, at 10%, Sterling Bank has the highest loan book for agriculture amongst commercial banks in Nigeria. He stated that the bank has been enjoying NIRSAL’s support and will continue to count on NIRSAL for the safety of their agribusiness investments.
Agbowo affirmed that it is commendable that “NIRSAL has provided a suitable environment for bank’s investment to be safe and sustainable. TOAJ Nigeria Limited who is into Cocoa aggregation and trading is one of such success stories. Sterling has been at the driving seat of agribusiness financing and will continue to partner with NIRSAL in providing access to finance for farmers to increase their output.”
Meanwhile, NIRSAL’s discretionary Interest Drawback (IDB) scheme is active on both facilities for the benefit of Gbagolo Integrated Farms Limited and TOAJ Nigeria Limited. The IDB is an interest rebate scheme offered to borrowers to reduce their cost of funds. It is offered in quarterly cycles to borrowers in good standing.
Gbagolo Integrated Farms Limited and TOAJ Nigeria Limited are among hundreds of agribusinesses that have been supported by NIRSAL Plc to boost their operations. Only weeks ago, NIRSAL Plc supported ADT Russet Ltd in Lagos with a 50% credit guarantee on a N1.15 billion facility to source and export cocoa beans.