Nigerian farmers have been called upon to imbibe the habit of insuring their loans as this will help in curbing the problem of bad loans.
The Executive Secretary, National Cooperative Financing Agency of Nigeria (CFAN) Mr Emmanuel Atama, made the call on Saturday in Abuja while addressing members of the Filtop Multipurpose Cooperative Society during their 3rd Annual General meeting.
Mr Atama urged cooperatives to ensure that loans given to them are insured by relevance insurance organisations as this will help cooperative especially overcome the challenges of bad loan, but that they must build a strong risk management frame work to ensure that the money given to them are gotten back.
“One of the product element of financial inclusion today as anchored by the Central Bank of Nigeria (CBN) under the financial inclusion strategy is insurance. And as cooperatives, we need to key into the credit risk insurance such that we would be able to mitigate risk in the event of failure of loans. So we are encouraging cooperatives to key into that aspect of insurance to make such that their loans are secured and to reduce the rate of defaults by members.
“This is not new but the awareness in respect to insurance issues is not so high, a lot of people have some reservations when it comes to the issue of pledges redemption, a lot of Insurance Companies prove difficult, but that not withstanding, loan insurance is what is obtainable in other clans, like Kenya and because we are part of the Cooperative moment in Africa, we will continue to encourage our people to take advantage of this especially now that the CBN is encouraging insurance as a product of the financial inclusion
“The beauty of it is that individual farmers can get this insurance because as it now, no loan is given out without insurance.
“That is why at this AGM, one of the deliverables is on loan insurance as part of the financial inclusion programme, so we will continue to sensitise to ensure that our members embrace insurance and mitigate risk associated with their businesses.