NADF to boost agricultural funding with non-interest finance

n n

The National Agricultural Development Fund has commenced the validation of its proposed Non-Interest Finance Framework and Guidelines to widen access to agricultural financing and support the Federal Government’s food security objectives.

n

This was contained in a statement issued by NADF on Tuesday following a Strategic Roundtable and Validation Session on the proposed framework and guidelines.

n

According to the statement, the initiative is aimed at ensuring that farmers, agribusinesses and other players across the agricultural value chain have access to diverse and innovative financing options.

n

The Executive Secretary/Chief Executive Officer of NADF, Mohammed Ibrahim, said non-interest finance had become an important component of Nigeria’s financial system, providing ethical, asset-backed and risk-sharing financing models that complemented conventional finance.

n

“Our objective is not simply to introduce another financing framework. It is to broaden the financing ecosystem for agriculture by ensuring that every credible financing option is available to Nigerian farmers, agribusinesses, and other value chain actors,” Ibrahim said.

n

According to the statement, the proposed framework would provide a structured and transparent basis for delivering agricultural interventions through licensed non-interest financial institutions while institutionalising governance, operational and Shari’ah compliance standards.

n

Ibrahim said the documents were deliberately presented as drafts to allow stakeholders to scrutinise them and contribute their expertise before finalisation.

n

“Today’s gathering marks an important milestone in that journey,” he said, urging participants to examine the draft documents critically, challenge assumptions where necessary and share practical experiences.

n

The statement quoted the Director of the Development Finance Advisory Department of the Central Bank of Nigeria, Dr Paul Oluikpe, as saying that significant work remained to be done to improve access to agricultural finance in Nigeria.

n

Oluikpe welcomed the proposed non-interest finance framework, describing it as an opportunity to bring an often-overlooked dimension of agricultural financing into the mainstream.

n

“With the non-interest finance framework that is being looked at and validated today, it’s really a key opportunity for us to bring in that particular dimension, because oftentimes it’s overlooked,” Oluikpe said.

n

Also speaking, the Deputy Chairman of the CBN’s Financial Regulation Advisory Council of Experts, Professor Bashir Aliyu Umar, said the proposed framework was consistent with efforts to promote financial inclusion and expand access to finance.

n

“What we are witnessing today is also following this trajectory of financial inclusion and easing access to finance and having a level playing field and even developmental perspective for the whole country whereby no segment of society is left out,” he said.

n

Providing an overview of the initiative, NADF’s Head of Investment, Olalekan Alabi, said the framework and guidelines were designed to establish a structured mechanism for deploying non-interest financing to eligible agricultural activities and value-chain interventions.

n

“Together, the Framework and Guidelines are expected to provide clarity on how NADF’s non-interest financing interventions will be structured, assessed, approved, implemented, monitored and reported,” Alabi said.

n

He added, “We are not here simply to confirm that the documents have been prepared. We are here to test their technical robustness and practical applicability.”

n

Alabi said stakeholders were expected to identify gaps, inconsistencies, overlaps and provisions requiring further clarification before the documents were finalised.

n

“Our objective is to have a set of Framework and Guidelines that are clear, technically sound, operationally practical, appropriately governed and capable of supporting NADF’s non-interest agricultural financing interventions,” he said.

n

The statement said the validation session brought together representatives of government institutions and regulatory agencies, development partners, non-interest finance experts, financial institutions and other stakeholders in the agricultural and financial sectors.

n n