Insurers cautious as Pula, Sadolene Farms N2.7bn loan chokes


Insurance companies participating in the Central Bank of Nigeria (CBN) Anchor Borrowers Scheme to drive agric business have become cautious after Pula, a consultant and Sadolene Farms got choked in an alleged N2,754,174,150 loan fraud.

The alleged fraud case, which is under investigations by the Economic and Financial Crimes Commission (EFCC), according to our source have established that Sadolene Farms through assistance of Pula collected N2,754,174,150 from CBN under the Anchor Borrowers Scheme through NIRSAL for crop production, but diverted the money to acquisition of real estate properties in various locations.

Pula, the anchor of the alleged fraud documentation according to our source has packaged this particular deal as if the farm existed, and engaged some insurers to underwrite the risks for the Area Yield Index Insurance(AYII), a new product that was still not skilled in the Nigerian insurance market.

Pula on behalf of the lead insurer handled the supposed collection of relevant data to safeguard the integrity of the scheme, and the data was used to calculate the payable claim, which insurance partners had settled promptly in the 2022 wet season transation.

As a requirement under AYII contracts, the insurer/calculating agent is required to at least sample 10 percent of all insured farms in a specified location for purposes of claim processing, and Pula had claimed to have sampled the farms, which was discovered not to be true because the farms were non-existent, an industry source said.

Pula was said to have responded to the EFCC queries, stating they sampled neighbouring farms in accordance with the contractual agreement, without actually sampling Sadolene being the biggest client with supposed over 3,500 farmers.

Pula was said to have deliberately misinformed partners in the placement of the Sadolene insurance risk, and leveraging on lack of technical competence by the local insurers, supported the execution of a fraudulent scheme.

Read also: Cashless policy traps Nigerians between fraud, failed transactions

Insider sources in EFCC said the security agency has made Pula to refund the consultancy fees it earned from the deal, while the insurer may have also refunded the portion ascribed for premium for insurance on the non- existing farm.

Pula’s increasing participation in placement of insurance risks through suspicious association with some government agencies is creating some concern among insurance stakeholders across Nigeria and other African markets including Tanzania, Ethiopia and Zambia.

For instance, the Tanzania Insurance Regulatory Authority(TIRA) has put a stop to Pula’s planned agric insurance workshop in the country, which was to herald the roll out of phase 1 of agriculture insurance pilot in Morogoro, Dodoma, Singida and Manyara Regions.

“The Authority noted that Ms. Pula has been conducting agricultural insurance trainings, experiments and providing insurance to farmers on various climate risks without being registered and licensed by TIRA, the agency said.

Therefore, the authority requires Ms. Pula to submit details of all insurance covers provided to farmers against climate risks, before any other activity in that country, a letter to Godwin Kalokola, operations lead Pula Advisory Kenya Limited stated.



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