CBN disburses N88 billion as agriculture loan The Central Bank of Nigeria (CBN) has so far released N88.53 billion under the Commercial Agriculture Credit Scheme (CACS). According to information posted on its website, out of 367 projects bids submitted by the banks, only 91 have so far been considered as eligible under the scheme. “Since inception of the scheme, the CBN has released the sum of N88.533 billion for disbursement to 79 projects/promoters and 12 State Governments,” according to the statement. This is out of 337 projects and 30 state governments that applied. Total undisbursed funds under the scheme, as at September 30, is N111.467 billion. In September, under the 2nd tranche, the state governments accessed N1 billion each for on-lending to farmers’ co-operatives and other areas of agricultural interventions in their various states. The states are Adamawa, Bauchi, Enugu, Gombe, Kebbi, Kogi, Kwara, Nassarawa, Niger, Ondo, Taraba, and Zamfara. The funds were accessed through four banks namely Fidelity Bank, Union Bank, UBA, and Zenith Bank. In August, nine state governments namely Adamawa, Bauchi, Gombe, Kebbi, Kogi, Nasarawa, Ondo, Zamfara, and Niger accessed N1.00 billion each for on-lending to cooperative farmers and unions in their various states. Adamawa and Kebbi States accessed the funds through Zenith Bank, Gombe and Niger States through Union Bank, while the five remaining states were funded through UBA. The CBN also withdrew a total of N9.2 billion comprising N7.003 billion from UBA, N581 million from GTB Plc, and N1.60 billion from First Bank, as undisbursed funds to 11 projects from UBA and 1 project each from GTB and FBN Plc during the second tranche. Funding initiative These disbursements are part of the N200 billion agriculture credit fund initiated by the Central Bank last year to boost commercial agricultural enterprises in Nigeria. The purpose of the fund is to fast track agricultural development in the country by providing credit to commercial agricultural enterprises at a single digit interest rate. It is expected to enhance food security, reduce cost of credit in agricultural production, and increase output and employment in the sector. Target commodities under the scheme include the cultivation of target crops (rice, cassava, cotton, oil palm, wheat, rubber, sugar cane, fruits, and vegetable); livestock (dairy, poultry, piggery); and fisheries. According to the CBN, 11 banks have been involved in the disbursement of the funds across to farms and agro allied businesses as at September, namely Access Bank, which disbursed N4.2 billion; Fidelity Bank, N1.5 billion; First Bank, N4.9 billion; Guaranty Trust Bank, N4.25 billion; Oceanic Bank, N2 billion; Skye Bank, N7.6 billion; Stanbic IBTC, N450 million; Union Bank, N7.3 billion; United Bank for Africa, N38 billion; Unity Bank, N5.5 billion; and Zenith Bank, N12.8 billion. Eligibility By the eligibility guideline released by the Central Bank, borrowers under the scheme shall be a limited liability company, with asset base of not less than N350 million, and with prospect to grow the net asset to N500 million in the next three years and comply with the provision of the Company and Allied Matters Act (1990). Such companies must also have a clear business plan, provide up-to-date record on the business operation, if any, and satisfy the entire requirement specified by its lending bank. The loan has a maximum tenor of seven years and/or working capital facility of one year, with provision rolls over, while the scheme allows for the moratorium in the loan repayment schedule.
Posted on: Fri, 22 Nov 2013 20:37:31 +0000