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CBN gives N234bn to 313 agric projects

By on August 18, 2014

The Central Bank of Nigeria has spent a total of N236.9bn on 313 projects in six years under the Commercial Agriculture Credit Scheme.

The amount came through 20 Deposit Money Banks since the inception of the scheme in 2009 to date.

These details are contained in the July report of the Development Finance Department of the CBN, a copy of which was obtained by our correspondent on Friday.

The CACS was established to finance large projects along the agricultural value chain.

The scheme is being administered at a single digit interest rate of nine per cent to beneficiaries for a period of seven years, which has been extended to 2025.

State governments, including the Federal Capital Territory, can access a maximum of N1bn each for on- lending to farmers’ cooperatives or other areas of agricultural intervention.

A breakdown of the disbursement according to the report revealed that N199.83bn was released from the CACS receivable account for 273 projects while the balance of N37.13bn was disbursed from the CACS repayment account for 40 new projects.

The report also showed that in July alone, the sum of N2.68bn was released from the CACS repayment account to five participating banks for six new projects.

It stated that of the 313 projects that had so far benefitted from the scheme, 282 were private promoters while the remaining 31 were state governments’.

It said the sum of N43bn had been accessed by 30 state governments and the FCT, noting that about 165,803 jobs had been created through the scheme since inception.

The report also showed that the sum of N457.7m was repaid by three banks for seven projects during the month, bringing the total repayment to N40.8bn for 83 projects.

It said, “The sum of N236.96bn has so far been released to the economy under the CACS in respect of 313 projects through 20 banks.

“The balance on the CACS funds as at end of July, 2014 was N169m. No bank was sanctioned for infraction on the CACS guidelines during the month. However, the total penalty charged for infractions stood at N1.24bn from inception in 2009 to July, 2014.

“From inception in 2009 to date, about 165,803 jobs have been created through the scheme; two out of the 282 private projects are wholly owned and managed by women.”

On the Nigeria Incentive-based Risk Sharing System for Agricultural Lending, the report said cumulatively, 46 credit risk guarantee cover valued at N16.28bn had been issued from inception to date.

NIRSAL is a mechanism designed to provide farmers with affordable financial products and reduce the risks                                                                            of exposure of financial institutions that lend to the agricultural sector.

It will also build the capacity of banks to lend to agriculture as well as provide incentives for those that are financing the sector.

The report listed some of the challenges facing the scheme as the validity of information provided by counter parties for credit risk guarantee; low public awareness and poor perception of NIRSAL.

 

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