The National Agricultural Development Fund, NADF, has received N3.4 million as surplus from Jaiz Takaful Insurance Limited under an insurance policy covering the Fund’s agricultural and investment risks.
The surplus, which arose from the 2024 financial year, was formally presented to the Fund by the Managing Director/Chief Executive Officer of Jaiz Takaful Insurance Limited, Ibrahim Shehu, during a visit to the Executive Secretary/CEO of NADF, Mohammed A. Ibrahim.
Shehu said the payment fulfilled an agreement reached with NADF when it subscribed to the Takaful insurance scheme.
“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,” he said.
He explained that Takaful, an insurance arrangement based on mutual assistance and risk-sharing, provides for eligible participants to receive a share of any surplus generated by the participating portfolio, subject to the scheme’s conditions.
“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,” Shehu said.
He said the arrangement offered customers more than protection against losses, as participants could also benefit from surplus sharing where the conditions of the scheme were met.
“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 expand access to non-interest financing for farmers and businesses across the agricultural value chain.
The Fund’s Executive Secretary, Mohammed A. Ibrahim, said it was validating its Non-Interest Finance Framework and Guidelines to 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,” he said.
Ibrahim said the Fund was exploring non-interest finance as an alternative avenue for addressing funding constraints in the agricultural sector and expanding financing options for farmers and agribusinesses.
The framework is expected to guide the Fund’s engagement with licensed non-interest financial institutions as it develops financing arrangements tailored to the needs of different operators in the agricultural sector.
The N3.4 million surplus payment highlights one of the features of Takaful arrangements, under which eligible participants may share in a portfolio’s surplus in accordance with the terms of the scheme.