NADF Advances Non-interest Agric Financing

The National Agricultural Development Fund (NADF) is deepening efforts to expand non-interest financing options for farmers and agribusinesses as part of strategies to address funding constraints across Nigeria’s agricultural value chain.

The initiative comes as the fund received the surplus from Jaiz Takaful Insurance Limited under an insurance arrangement covering agricultural and investment risks, providing a practical example of how non-interest financial instruments can offer risk protection and surplus-sharing benefits.

The managing-director of Jaiz Takaful Insurance Limited, Ibrahim Shehu, has visited the executive secretary of NADF, Mohammed Abu Ibrahim in Abuja where he formally presented the fund with confirmation of its entitlement to the surplus arising from the 2024 financial year.

Shehu said the payment fulfilled an agreement reached with NADF when the fund subscribed to the Takaful cover, under which eligible participants can receive a share of any surplus generated by the participating portfolio, subject to the scheme’s conditions.

“The main reason why we had to come to your office was to demonstrate to the management of NADF that the promise we made to them is now being kept.

So, we came to present a symbolic letter stating clearly what the amount of surplus the organisation is entitled to. Precisely, the sum of N3.4 million.

While insurance is to indemnify customers in the event of loss, we made a promise to them that Takaful has some other value proposition and that is that if the customer did not have a claim and the portfolio they participated in made profits, we shall share part of that profit with them as surplus,” he said.

The development comes as NADF works to broaden financing options for farmers, agricultural enterprises and other businesses across the agricultural value chain through alternative financial products that respond to their varying needs.

The executive secretary of NADF, Mohammed Abu Ibrahim, said the fund was currently validating its non-interest finance framework and guidelines, which would provide a structured approach to engaging licensed non-interest financial institutions.

“The framework is part of our effort to develop financing options that respond to the different needs of farmers and businesses across the agricultural value chain,” Ibrahim said.

He said the fund was exploring non-interest finance as an additional avenue for addressing financing constraints in agriculture and expanding the options available to farmers and agribusinesses.