The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL, has disclosed that it has recovered 51 percent of its legacy loans.
NRSAL’s Managing Director, Aliyu Abdulhameed stated this in response to the Central Bank of Nigeria, CBN’s freezing of loan issuance to NIRSAL until it recovers the previous loans guaranteed for agriculture.
While the CBN did not give Abdulhameed a deadline to recover the loans, the tone of the CBN memo suggests that the apex bank will not tolerate any tardiness from the NIRSAL leadership.
It would be recalled that the CBN issued a Global Standing Instruction, GSI, with Ref: CSD/DIR/CON/DCS/015/080 to the NIRSAL MD on March 10.
In the memo, the CBN informed Abdulhameed that the Director of Development Finance, CBN has been instructed by the Committee of Governors to “suspend further grant of loans to the NIRSAL PLC, pending recovery of outstanding loans earlier granted”.
The CBN also instructed that “the NIRSAL PLC and the Development Finance Department should establish a workable loan recovery programme, which the NIRSAL PLC should ensure its success, failing which the Committee of Governors should be informed”.
“NIRSAL PLC should thenceforth, submit monthly Reports of its loan recoveries, both from the legacy and current year loans, to the Bank through the Development Finance Department,” the memo added.
Responding to the memo, the NIRSAL boss issued bullet points of his achievements in the last five years in which he said he is instrumental to the recovery of “88 per cent of all claims paid under the NIRSAL Credit Risk Guarantee, CRG since inception and recovered 51 per cent of legacy Anchor Borrowers Programme (ABP) loans”.
“Despite inheriting a Non-Performing Loan (NPL) portfolio of 7.2 per cent in 2015, which was higher than the industry average at the time, NIRSAL now maintains a less than one percent Non-Performing Loan portfolio, compared to six per cent average rate currently obtainable across the banking industry,” he said.
According to him, the feat was achieved through robust credit risk management practices and effective loan recovery strategies which he introduced.
He added that NIRSAL under his leadership has “generated ¦ 510billion worth of economic activities; 515,000+ direct employment created/sustained; and 3million+ Nigerian lives positively impacted.
“Funding in the sum ¦ 145 billion has been facilitated to various actors for mechanisation activities, input distribution, and the production, processing, trading and marketing of agricultural commodities from various sources.
“Because of NIRSAL’s solutions, commercial banks have pledged to provide an additional ¦ 160 billion to fund agriculture, provided the NIRSAL guarantee and its structured approaches are in place,” he added.