NADF receives Takaful surplus from Jaiz Insurance

The National Agricultural Development Fund (NADF) has received N3.4 million in surplus from Jaiz Takaful Insurance Limited under an insurance policy taken by the Fund to cover agricultural and investment risks.

The Managing Director/Chief Executive Officer of Jaiz Takaful Insurance Limited, Ibrahim Shehu, disclosed this when he visited the Executive Secretary/CEO of NADF, Mohammed A. Ibrahim, to formally present the Fund with confirmation of its entitlement.

Shehu said the payment was in fulfilment of an agreement reached with NADF when the Fund subscribed to the Takaful cover, adding that the surplus arose from the 2024 financial year.

“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,” Shehu said.

He explained that under the Takaful arrangement, participants who have no claims during the coverage period may be entitled to a share of any surplus generated by the participating portfolio, subject to the terms of the scheme.

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“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,” he said.

Shehu said the Takaful model goes beyond providing protection against losses, as it also offers participants an opportunity to benefit from surplus sharing when the conditions of the arrangement are 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 intensifies efforts to develop alternative financing mechanisms for the agricultural sector, including non-interest finance.

The Executive Secretary/CEO of NADF, Mohammed A. Ibrahim, said the Fund was currently validating its Non-Interest Finance Framework and Guidelines, which would provide a structured basis for collaboration with licensed non-interest financial institutions.

According to him, the framework is designed to expand financing options for farmers and businesses operating across the agricultural value chain.

“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 NADF was exploring non-interest finance as an additional avenue for addressing financing constraints in agriculture and broadening access to funding for farmers and agribusinesses.

The N3.4 million surplus payment, according to the parties, provides a practical example of how Takaful and other non-interest financial instruments can combine risk protection with potential financial returns within the terms of an agreed arrangement.

The development is expected to further support NADF’s efforts to diversify financing mechanisms and strengthen access to sustainable financial services within Nigeria’s agricultural sector.