The Agric Credit Scheme which was introduced in 1978 to induce banks to channel credit to the agricultural sector has so far guaranteed N55.99bn for 763,514 borrowers as at May 2012.
This disclosure was made by Paul Eluhaiwe, Director finance department of the Central Bank of Nigeria, CBN,? in a paper entitled: “CBN Intervention in the Real Sector,” presented at the 17th seminar for finance correspondents and business editors in Akure, Ondo State.
Eluhaiwe said the scheme which provides 75 per cent guarantee in respect of loans granted by banks for approved agricultural purposes, has had its share and called-up capital increased from the initial N100million to N3.0bn.
“A total of N34.11bn was recovered from 562,224 borrowers while the fund also settled 159,589 IDP claims valued at N1.009bn from inception in 2003 to May 2012,” he said.
On the N200billion Commercial Agriculture Credit Scheme, (CACS) which was established by the CBN in 2009, Eluhaiwe said,N175.53bn has been disbursed so far to state governments but lamented that some state governments have not deemed it necessary to access the funds.
For the states that have accessed the funds, he said they were directed towards 193 private sector projects and 29 state government projects? which has in turn created about 32, 801 jobs and expansion of large ticket agricultural projects along the value.
The CACS scheme is administered at a single digit rate of nine per cent to beneficiaries for a seven-year period. State governments including the Federal Capital Territory, FCT can access a maximum of N1bn each for on-lending to farmer’s cooperatives or other areas of agricultural interventions that suit them.
He said a major problem that financing in the agriculture sector has faced in Nigeria was that value chains have not been properly developed which made? it difficult for the farmers to carry out their farm business in a way that it should succeed. This he said, has made the sector unattractive to banks who were not willing to extend loans to them.