The Central Bank of Nigeria, CBN, Asaba branch, rewarded three farmers in Delta State under its Agricultural Credit Guarantee Scheme Fund (ACGSF). The awardees were chosen based on their timely repayment of loans, proper utilization of loan facilities, among others.
The ACGSF was established in 1977 and became operational a year after. The original paid-up capital was N100 million and N85.6 million, respectively. The scheme was set up to encourage banks to lend to those engaged in agricultural production and agro-processing activities, in order to stimulate total agricultural production for both domestic consumption and export. The scheme is also expected to provide guarantee on loans by financial institutions. The fund’s liability, however, is limited to 75% of the amount in default net of any amount realized by the bank from the sale of the security pledged by the borrower.
There was a significant increase in lending quotas from banks under the scheme, however, after the deregulation of the financial system, banks became averse to lending to the agriculture sector. In order to reduce this trend, several innovations and products were developed.
The CBN Asaba branch Controller, Mrs Patricia Ukwu, revealed that the branch has guaranteed loans in excess of N3.8 billion for over 33,000 farmers under the ACGSF. In order to sustain this across the nation, the CBN introduced the ‘Best Farmers Award’, which is not just to celebrate awardees but to also encourage the general public to get involved in the programme and adopt best practices in farming.
This year, the CBN has facilitated N122.63 Billion as loans to farmers under the scheme. According to the new amendments in the scheme, the new regulations accommodates an increase in maximum amount for loans without collateral from N20, 000 to N100, 000, while loans with collateral has been increased from N10 million to N50 million.