- Deal to increase number of insured farmers to 3.8m
Ndubuisi Francis in Abuja
The Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) has signed a partnership agreement with two leading Moroccan agricultural insurance and re-insurance companies, Mutuelle Agricole Marocaine D’Assurances (MAMDA) and MAMDA Reassurance respectively to expand the range of agricultural insurance products and coverage in Nigeria.
The partnership is designed to enable the exchange of ideas, enhance NIRSAL’s technical capacity to develop innovative and targeted insurance products to protect small, medium and large scale agricultural investments from natural disasters such as floods, droughts and crop diseases.
NIRSAL’s collaboration with MAMDA and MAMDA Re is a product of the bilateral agreements that President Muhammadu Buhari signed in December 2016 during the visit of the King of Morocco King Mohammed VI.
NIRSAL is an initiative of the Central Bank of Nigeria (CBN), the Bankers Committee(BC) and the Federal Ministry of Agriculture & Rural Development.
It provides guarantees in form of Credit Risk Guarantee (CRG) as a comfort for the banks to lend and incentivise the farmers through provision of Interest Drawback Programme (IDP) to be paid quarterly based on the agricultural project.
The guarantee ranges from about 30-75 per cent depending on the agricultural value chain involved. IDP also ranges from 20-40 per cent depending on the category.
Specifically, the partnership with the two Moroccan firm will include the design and development of named peril crop insurance, index- based insurance products including area, weather and yield.
It will also involve advanced technical training on surveying aggregated smallholder farmlands, large commercial and plantations farms and loss assessment methods, technical training on Geographic Information system(GIS),technology for agriculture and Remote Sensing application in Agricultural Crop Insurance;
Another significant part of the programme is the extensive training of NIRSAL employees in Morocco in all areas related to agricultural insurance and related risk management tools.
Other aspects include provision of technical assistance to NIRSAL in new insurance product development, training in the use of technology to enhance agricultural productivity and capacity building on parametric insurance establishment and development;
Speaking at the agreement signing ceremony in Abuja, the Managing Director of NIRSAL, Mr. Aliyu Abdulhameed said that “as a private sector-led policy tool of the government, exercising the mandate to de-risk agriculture, increase private sector investment to unleash the sector’s unmatched potential for job creation, food security and economic diversification” NIRSAL was particularly excited at the collaboration.
He added that the strong insurance focus of the collaboration was in line with NIRSAL’s corporate objective to expand insurance products for agricultural lending.
NIRSAL’s target, he stressed, was “to move insurance coverage from the level of about 0.5 million to 3.8 million agricultural primary producers.”
This, he said, will help reduce credit risks, increase lending and investment across the entire agricultural value chain.
He thanked President Buhari for his leadership and vision to entrench agriculture as the driver of Nigeria’s economy.
Abdulhameed also lauded the leadership of MAMDA and MAMDA Re for taking the bold step in partnering with NIRSAL.
According to him, this was in continuation of its mandate to de-risk agriculture and facilitate the flow of finance to the sector to help achieve the objectives of the Economic Recovery Growth Plan (ERGP) of the administration to diversify the economy, attain self-sufficiency in food production and entrench inclusive economic growth.