CBN Promises To Increase Credit Guarantee To Farmers
The Central Bank of Nigeria (CBN) has disclosed plan to increase its credit guarantee to small scale farmers through its Agricultural Credit Guarantee Scheme Fund (ACGSF).
The Chairman ACGEF, Mrs. Olubunmi Siyanbola, said this at the strategic retreat by stakeholders in Lagos.
Siyanbola, said the scheme which offers credit guarantee for risks by giving loans to small farmers, presently at N100,000, is too low, saying that part of the discussions at the retreat was also to review upward the intervention.
She said: “There is crucial need for us to do all that it takes to take care of does who actually constitutes to the growth of the agricultural sector towards its huge contribution to economic development towards this nation which are the peasant farmers. “There is the need for us to enable them to access the finance so that they could do more to ensure food stability in the country.”
“The Fund has been in existence for 40 years and continues to gain attention as evidenced by the increasing on-going debate over its relevance due to the declining traction among banks.
“More importantly, there have been attempts to review the main contextual issues in the operability of the fund in the 21st century, but these attempts have been delayed by the non-constitution of the board until 2018, since its dissolution in 2007 by the federal government.
“For instance, the maximum loan amount guaranteed under the Fund for the different categories of farmers, that is, individual, corporate bodies and cooperative societies, respectively, has lost value due to the rising costs of goods and services coupled with the dynamics of the macroeconomic situation of the economy.”
She further added: “Permit me to say that there is no gainsaying the fact that despite these challenges, the Fund has helped in some ways in tackling the scourge of financial access among agro-preneurs in Nigeria.
These challenges, however, suggests that a lot more work needs to be done to reposition the Fund in the right pedestal for agricultural development.”
Furthermore, she said: “The focus of the present government is to reposition the country to diversify it from its reliability from its mono product that is oil to non-oil, and you have seen the impact of that till date.
“Meanwhile, agriculture is supposed to be a lunch pad towards achieving that.
“This retreat would afford us the opportunity to share ideas and for us to listen to well-chosen consultants and then share ideas to recommend the way forward.
“I can tell you, the maximum amount that is due to a farmer now is very low to make any meaningful impact on the farmers and their activities which is about N100,000.”
The CBN in its economic report for October 2018 released recently, showed that agricultural activities continued to receive boost due to moderate rainfall recorded in various states.
Harvest of of yam, maize, rice, cassava, potatoes, groundnut and legumes were dominant across the country during the month, the report stated.
In the livestock sub-sector, farmers continued with breeding of birds to take advantage of the end of the year sales.
The Agricultural Credit Guarantee Scheme (ACGS) guaranteed a total of N442.22 million to 3,055 farmers in the review period. The amount represented a decline of 19.2 per cent and 18.3 per cent, below the respective levels in the preceding month and the corresponding period of 2017.
Sub-sectoral analysis showed that food crops got the largest share of N205.8 million (46.5%) guaranteed to 1,410 beneficiaries, followed by the livestock sub-sector, N74.8 million (16.9%), guaranteed to 324 beneficiaries.
Also, the sum of N70.1 million was disbursed to mixed cropping (15.9%), guaranteed to 913 beneficiaries; while fisheries, cash crops and ‘Others’ got N43.0 million (9.7%), N39.8 million (9%) and N 8.7 million (1.97%) guaranteed to 116, 248 and 44 beneficiaries, respectively.
Analysis by state revealed that 28 states and the Federal Capital Territory benefited from the scheme in the period under review, with the highest and lowest sums of N47.60 million (10.8 %) and N1.05 million (0.2 %) guaranteed to farmers in Ogun and Nassarawa states, respectively.
Also, the report revealed that as at September 20, 2018, the total amount released since inception by the CBN under the Commercial Agriculture Credit Scheme (CACS) to participating banks for disbursement, amounted to N577.35 billion in respect of 568 projects.