NIRSAL recovers 51 per cent of legacy loans

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Iyalaya Amala

NIRSAL recovers 51 per cent of legacy loans

 

 

 

 

 

 

 

The Managing Director, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc) Aliyu Abdulhameed has recovered 51 per cent of legacy loans.

Abdulhameed stated this when it was revealed that the Central Bank of Nigeria (CBN) had frozen more loans to NIRSAL until Abdulhameed recovered the loans NIRSAL guaranteed for agriculture.

Though 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 boss.

The CBN issued a Global Standing Instruction (GSI) with Ref:CSD/DIR/CON/DCS/015/080 to the NIRSAL Managing Director on March 10, 2021.

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, the parent entity of NIRSAL, also instructed Abdulhameed 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”.

Going forward, the apex bank has demanded that “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”.

Responding, Abdulhameed 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”.

According to Abdulhameed, “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”.

This feat he said “is a result of robust credit risk management practices and effective loan recovery strategies introduced” by him.

Abdulhameed said NIRSAL under his leadership has “generated ¦ 510billion worth of economic activities; 515,000+ direct employment created/sustained; and 3million+ Nigerian lives positively impacted.

He said: “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.”

In addition, “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”.

The NIRSAL chief said “the rate of bank lending to agriculture has risen from 1.4 percent at inception to 4.49 per cent as of December 2019.

GTWorld

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