CBN Guarantees N130.9bn To Farmers Under ACGSF

The Central Bank of Nigeria (CBN) has guaranteed the sum of N130. 90 billion loan to farmers under the Agricultural Credit Guarantee Scheme Fund (ACGSF) since inception in 1977 to May, this year.

The chairman of the board of the ACGSF, Mr. Stephen Okon, gave the update at the 2021 National Best Farmers of the Year Award, held in Abuja, yesterday

According to him, “The ACGSF Scheme has proved relatively successful in de-risking the agricultural sector in Nigeria as evidenced in the number of loans guaranteed from inception to date.

“A total of 1,232,326 loans valued N130.903 billion were guaranteed from inception to May 2022 out of which 973,646 beneficiaries had repaid a total of N98.91 billion.”

The chairman said that the federal government and the CBN both contributed to the Fund in the ratio of 60 per cent and 40 per cent respectively, with the CBN doubling as the managing agent and the secretariat.

Okon said that the timing of the event was apt, given the fact that countries across the globe were experiencing challenges, resulting from the Russian-Ukrainian War.

“Its impact being – global oil and food crises affecting the agricultural sector which has contributed to disruptions in domestic food supply chains and other shocks affecting food production.

“This has led to the loss of incomes, food security risks, inflationary trends, and creating serious tensions in many countries,” he said.

The chairman noted that achieving food security not only carried significant benefits for human health but also served as the basis to achieve sustained economic growth.

“Awakened by a potential rise in food insecurity, many countries and organizations are mounting special efforts to keep agriculture safely running as an essential business,” he added.

In his remarks, the Abuja Branch Controller of the CBN, Mr. Michael Ogbu, said that the successes achieved under the ACGSF had led to significant improvement in Deposit Money Banks’ (DMB) lending to the agricultural sector and to a remarkable growth in the agri-business value chain in Nigeria.

He stressed the determination of the management of the CBN towards supporting farmers to grow exponentially, saying, “ that way, Nigeria can actually grow what she eats.”

The ACGSF was established by Decree No. 20 of 1977 to guarantee agricultural credit facilities granted to farmers.

The Scheme encourages Deposit Money Banks and Microfinance Banks to lend to those engaged in agriculture by providing guarantee.

It mitigates risks associated with banks’ lending to agriculture by guaranteeing to pay banks 75 per cent of the net amount in default in accordance with the provisions of the enabling Act.

Under the new ACGSF Amendment Act 2019 the maximum for a non-collateralized loan has increased from N20,000.00 to N100,000.00, while the maximum for a collateralized loan moved from N10 million to N50 million.

Mr. Peter Okonkwo emerged overall winner of the 2021 National Best Farmer of the Year.

He was said to have taken an N8. 050 million facility under the scheme for the procurement of additional agricultural plants, machineries and packaging in 2018 and with it, generated N15 million income and a profit of over N2.7 million.