The federal government, through the Central Bank of Xigena (CBN), has opened Development Finance Offices in all CBX branches nationwide so as to take close the administration of the Agricultural Credit Guarantee Scheme (ACGS) to farmers in Nigeria.
CBN announced this new guideline, through a statement it released yesterday.
“Apat 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. The Development Finance Offices are manned bv 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 thev are located unless banks are otherwise directed.”
CBN noted that the agriculture loans must be used for purposes for which they are obtained, deviation would attract a jail term of up to 5 years.
“Banks should remind prospective borrowers under the Scheme that it is an offense for winch one may be imprisoned for five years to apply the loan for purposes other than those for which they are given.”
The Central Bank set a single obligor limit for non-tangible collateral at XI 00,000, while the obligor limit for individual, group/co-operative, or a corporate society is X50,000,000 (Fifty million naira only) for secured loans.
According to the apex bank, based on the Act, the liability of the Fund will be 75 percent 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 X500,000.00 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 19 (Decree No 20) and as amended on 13th June 1988, and 26th June 2019.
The Act originally provided for a Fund of Hundred Million Naira (100,000,000) by the Federal Military Government (60%) and the Central Bank of Nigeria (40%).