The National Agricultural Development Fund (NADF) has been notified of a N3.4 million surplus payment from Jaiz Takaful Insurance Limited, arising from an agricultural and investment risk policy the Fund held during the 2024 financial year. The confirmation was delivered in person by Jaiz Takaful's Managing Director and CEO, Ibrahim Shehu, during an official visit to NADF's Executive Secretary and CEO, Mohammed A. Ibrahim, where a formal letter detailing the amount was presented.
How the Takaful Surplus Works
Shehu explained that under a Takaful arrangement, policyholders who make no claims during a coverage period can receive a share of any profits generated by the participating portfolio. He said the visit was meant to show NADF's management that a commitment made at the time the policy was taken out had now been honoured.
"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," Shehu said. He added: "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."
NADF's Non-Interest Finance Push
The visit coincided with a broader initiative at NADF to formalise its engagement with non-interest financial instruments. Mohammed A. Ibrahim said the Fund is currently in the process of validating a Non-Interest Finance Framework and Guidelines, designed to give structure to how the Fund works with 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 described non-interest finance as an additional avenue for tackling funding gaps in agriculture, offering farmers and agribusinesses access to instruments that align with different financial preferences and requirements.
The surplus payment from Jaiz Takaful serves as a practical illustration of the potential benefits of such arrangements, demonstrating that Takaful products can offer both risk protection and financial returns when the conditions of the scheme are met.
