26,830 loans valued at N3.6 billion have been guaranteed to farmers under the CBN’s Agricultural Credit Guarantee Scheme Fund.
The Central Bank of Nigeria announced that banks guaranteed 28,830 loans valued at N3.6 billion to farmers under its Agricultural Credit Guarantee Scheme Fund (ACGSF) from January to October 2020.
According to Vanguard , the CBN said the loan values had grown in the past 10 months to 26,830 loans worth N3.6 billion. The loans in the ACGSF from January to October were :
- 1,923 loans worth N572.3 million was guaranteed for livestock farmers.
- 531 loans worth N135.5 million for fishery.
- 5,925 loans worth N541.6 million were guaranteed for mixed farming.
- 16,976 loans worth N1.9 billion for food crops farming.
- 1,942 loans worth N345.5 million for cash crops farming, while
- 333 loans worth N69.9 million was guaranteed for other types of farming.
About the scheme
The Agricultural Credit Guarantee Scheme Fund (ACGSF) was established by Decree No. 20 of 1977 and commenced business in April 1978. Its original share capital and paid-up capital were N100 million and N85.6 million respectively. The Federal Government holds 60% and the Central Bank of Nigeria holds 40% of the shares.
The Capital base of the scheme was increased to N3billion in March 2001. The fund guarantees credit facilities extended to farmers by banks, up to 75% of the amount in default net of any security realized.
What you should know
Nairametrics reported last month that the distribution of loans under the ACGSF declined by 31.62% in 2 years, according to the National Bureau of Statistics (NBS).
The NBS report showed that fund distribution under ACGSF declined by approximately 31.62% from N11.90 million allotted in 2017 to N8.14 million in 2019.
The significant decline was also recorded both in terms of the volume and value of loans under the scheme in the period under view. For example, the volume of loans worth N100,000 and below declined by 37.14% from 26,825 in 2017 to 16,862.
Nairametrics reported in September that CBN plans to increase funding in the agricultural sector from 4% to 10% of the entire credit in the banking system.
CBN revealed that the country needs to increase its level of bank credit to the agricultural sector by over 50% within the next 4 years to boost food production.