NIRSAL: Guiding new agro-finance revolution

Challenging periods force new thinking and facilitate new ideas. Significantly, these periods also throw up the men to drive the needful innovations and give life to a new, imperative order. For Africa’s behemoth, while the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL Plc, is the transformative platform, Mr. Aliyu Abdulhameed, is its pioneer Managing Director/Chief Executive Officer.

Abdulhameed is a multi-talented Agricultural Economist with varied experience in Institutional Development, Programme Management, and Process Development and Improvement. NIRSAL is a US$500million Non-Bank Financial Institution wholly-owned by the Central Bank of Nigeria (CBN), created to redefine, dimension, measure, re-price and share agribusiness-related credit risks in Nigeria.

With a specific vision of transforming the economy, delivering inclusive growth and impacting lives, NIRSAL’s mission is to forge partnerships between agriculture and finance; maximizing the potential of agriculture for food security, job creation and economic growth.

Established in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD) and Nigerian Bankers’ Committee in 2013, NIRSAL’s mandate is to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalizing incentives for agricultural lending through its five strategic pillars. These are: Risk Sharing, Insurance, Technical Assistance, Incentives and Rating.

Under its first pillar of Risk Sharing, NIRSAL shares credit risks with providers of Finance and Investments (up to 75% loss incurred) and under the second pillar of Insurance, develops innovative Insurance products to beneficiaries.

Under the third pillar of Technical Assistance, it builds capacity of financial institutions and agricultural value chain players; Fixing the broken AVC. Under Rating, the agency rates lenders and Value Chain actors according to their effectiveness while the last pillar – Incentive Mechanism – rewards value added performance by AVC actors and lenders.

Cut to the bone, NIRSAL specialises in Value Chain Fixing, Agribusiness Project Development, Finance Facilitation and Agricultural Risk Management. Clearly, in a Third World country in a legitimate hurry to develop and catch up with its Asian Tiger peers, agriculture and technology are the way to go – agriculture especially. There’s more.

The integrated and holistic approach by NIRSAL attracts finance and investments to the agribusiness, allowing such funds to be well optimized while de-risking the agribusinesses in a controlled environment for sustainability.

Significantly, by creating sustainable agribusiness models with validated cash flows and managing and sharing project and credit-related risks, NIRSAL provides guarantee to financiers and investors, boosts their confidence and eliminates barriers to the free flow of finance and investment to agriculture and agribusiness in Nigeria.

The agency further demonstrates the viability and sustainability of its value chain interventions and business models through the setup of Pilot Projects as proofs of concept under effective project management teams led by experts with a view to inducing interest and attracting investment from both private and public sectors to replicate pilot projects and achieve scale.

Effective agricultural risk management is the ultimate intended purpose of all products and services offered by NIRSAL. The institution anticipates all types of risk associated with agricultural value chains, agricultural finance and human behaviour and deploys its tools, techniques, methodologies and partnerships to prevent, minimize and share the risk.

NIRSAL’s financing frameworks also present a window of financing to address working capital constraints associated with specific segments of agricultural value chains for transactions fulfilling a set of conditions; and falling within NIRSAL business models that have been pre-agreed with financial institutions under the NIRSAL guarantee.

As it were, special purpose vehicles like NIRSAL require special purpose drivers. In a conservative milieu where new thinking could actually be a risky enterprise, resolute, focused, daring and competent folks are indispensable. This has been demonstrated time and again in human history.

In effect, to unlock agricultural production potentials and redirect the agro-business enterprise in Nigeria – especially the financing dimension of the big picture, big thinkers and unorthodox characters are needed. And that is where providence and foresight enlisted the unassuming Abdulhameed.

Mr. Abdulhameed holds a Bachelor of Science degree in Agricultural Economics and Rural Sociology and a Master’s Degree in Public Administration (with specialization in Public Policy) from the Ahmadu Bello University, Zaria. He also holds an Executive Masters Certificate in Project Management from the Project Management College, United Kingdom.

With a rich blend of formal learning, passion, research and hands-on experience in both the private and public sectors of the Nigerian economy, Abdulhameed has become one of the foremost Agribusiness Advocates in Nigeria and, indeed, Africa. His experience cuts across Consultancy Services, Commercial Agricultural Production, and Processing, Commodity Marketing, Input Management, Agricultural Extension Services, Transportation and Logistics.

This broad exposure in agriculture and agribusiness made him the preferred candidate to lead Nigeria’s most robust and innovative Agriculture Sector Development Finance Institution. In NIRSAL, he is building an avant-garde institution leading Nigeria’s flight out of poverty and unemployment through the conceptualization and deployment of agricultural programmes to engage and enrich millions of smallholder farmers and other actors in the agricultural value chain.

A relentless campaigner for the use of technology to drive agriculture in Africa, Abdulhameed’s dexterous leadership has put NIRSAL in the continental spotlight. Many reputable global players in the agriculture sector including the African Development Bank (AfDB), United Nations Industrial Development Organization (UNIDO), the United States Agency for International Development (USAID), and Global Alliance for Improved Nutrition (GAIN) demonstrated their appreciation of NIRSAL’s approach through partnerships and joint events.

Governments across Africa are also understudying and adopting the NIRSAL model to continue the chain of agricultural development across the continent.

Abdulhameed is a Fellow of numerous professional associations including the Microfinance Association of the United Kingdom, the Institute of Credit Administration (ICA) in Nigeria, Chartered Institute of Procurement and Supply Management of Nigeria (CIPSMN), and a Member of the Nigerian Institute of Management. He is also, a Senior Associate Member of the Risk Managers Association of Nigeria (RIMAN), and an Honorary Member of the Chartered Institute of Bankers of Nigeria (CIBN).

It’s then little wonder that NIRSAL’s Abdulhameed is genuinely guiding a new agro-finance revolution in Nigeria.