The Central Bank of Nigeria (CBN) has opened Development Finance Offices in all its branches across the nation in order to move the administration of the Agricultural Credit Guarantee Scheme (ACGS) closer to farmers.
This is part of the new guidelines of the scheme, announced by the apex bank Monday.
It said, “Apart from the Head Office of the Central Bank of Nigeria, Development Finance Offices have been established in all branches of the Central Bank to administer the Agricultural Credit Guarantee Scheme.
Read Also: Lawan gives Appropriations Committee deadline to conclude budget defense
“The Development Finance Offices are manned by Officers who function under the overall control of the Branch Controllers of the Central Bank in each branch.
“In order to ensure that matters connected with the Scheme are dealt with expeditiously, the Officers will treat such matters in the state in which they are located unless banks are otherwise directed.”
The CBN said, however, that the agriculture loans must be used for purposes for which they are obtained, as a diversion would attract a five-year jail term.
According to the new guidelines, “Banks should remind prospective borrowers under the Scheme that it is an offence for which one may be imprisoned for five years to apply the loan for purposes other than those for which they are given.”
It put a single obligor limit for non-tangible collateral at N100,000 “while the obligor limit for individual, group/co-operative or a corporate society is N50,000,000.00 (Fifty million naira only) for secured loans.”
The bank said that based on the Act, the liability of the Fund will be 75 per cent of the amount in default net of any amount realized by the bank from the security it got from the borrower, subject, in the case of a loan to an individual, a co-operative society or a corporate body, to a maximum of N50,000,000 (Fifty million naira only).
CBN also said that Revised Regulatory and Supervisory Guidelines of MFBs must be strictly adhered to as it stipulates that the maximum principal amount for a microloan should not exceed N500,000.00 or 1% of the shareholders’ fund unimpaired by losses.
The Agricultural Credit Guarantee Scheme Fund was established by the Federal Military Government under the Agricultural Credit Guarantee Scheme Fund Decree 1977 (Decree No. 20) and as amended on 13th June 1988, and 26th June 2019.
The Act originally provided for a Fund of N100 million subscribed to by the Federal Military Government (60 per cent) and the Central Bank of Nigeria (40 per cent). (Vanguard)
