Revealed: How CBN’s scheme boosts agriculture with N104bn in 38 years

As part of efforts in diversifying the Nigerian economy, the Central Bank of Nigeria (CBN) under the Agricultural Credit Guarantee Scheme Fund (ACGSF) has granted 1,059,847 individual, informal group, co-operatives and company farmers N104billion loans since its inception in 1978, information available to The Daily Times has revealed

In our fact findings, it was revealed that individual famers since its establishment in 1978 have benefited tremendously from the scheme, followed by Co-operatives farmers.

The breakdown of loans guaranteed, however, showed that 1,028,818 individual farmers have accessed N97.3bn between 1978 to 2016, while11,779 informal group were granted N1.84bn in 37 years.

Others are 16,998 Co-Operatives farmers were granted N3.29bn and 2,252 companies were granted N1.6bn between 1978 to 2016

In 1978 when the agriculture credit scheme was established, the CBN granted N75.8m to 2,391 farmers.

The loans guaranteed by CBN crossed the N1bn mark in 2002 to N1.05bn, a year when the capital base of the Scheme was increased to N3bn in March, 2001.

The scheme was established by Decree No. 20 of 1977, and started operations in April, 1978. Its original share capital and paid-up capital were N100m and N85.6m, respectively. The Federal Government holds 60 per cent and the apex bank, 40 per cent of the shares.

The Fund guarantees credit facilities extended to farmers by banks up to 75 per cent of the amount in default net of any security realized.

The Fund is managed by the CBN, which handles the day-to-day operations of the Scheme.

Between 1978 and 1989 when the government stipulated lending quotas for banks under the Scheme, there was consistent increase in the lending portfolios of banks to agriculture, but after the deregulation of the financial system, banks started shying away by reducing their loans to the sector due to the perceived risk in the agriculture sector.

Meanwhile, the loans guaranteed continued to increase significantly in 2004 to N2.08bn; N3bn in 2005; N4.26bn in 2006; N4.4bn in 2007; N6.7bn in 2008; N8.3bn in 2009; and N7.7bn in 2010.

The CBN’s loan guaranteed however hits N10.2bn in 2011 but dropped to N9.7bn in 2012.

It dropped further to N9.4bn in 2013 and increased significantly to N12.9bn in 2014, the highest ACGSF by CBN since its inception.

In addition, 69,436 and 58,548 farmers were granted N11.44bn and N8.1bn between 2015 and 2016.

Information by CBN revealed that Livestock, Fisheries Food Crops and Cash Crops dominated loans guaranteed analyzed by purpose from Inception.

In a related development, the apex data showed that Edo and Ogun states are leading in its N3.88bn Agricultural Credit Guarantee Scheme (ACGS) in 34 states.

Data from the apex bank disclosed that a total of 27,207 farmers, both individual and informal group have participated in the scheme between January and August 2017.

In line with this vision to diversify the nation’s economy away from oil & gas sector, the CBN, under the leadership of Mr. Godwin Emefiele has pursued with added vigour intervention schemes such as ACGS and the Anchor Borrowers’ Programme (ABP) to mention but few.

Farmers in the mentioned states targeted crops such as rice, maize, palm oil, sorghum, tomatoes, cassava, cocoa, cotton, dairy, and groundnut.

The Daily Times can report that large chunk of these funds were accessed through registered Microfinance Banks (MFBs), while smaller portion were accessed through Union Bank of Nigeria and Diamond Bank Plc.

But between January and August, a total of 2,009 farmers in Edo State accessed N385million through the CBN’s ACGS while 1,725 famers in Ogun State accessed N356million through the same scheme in eight months.

Enugu State has the highest amount of informal farmers at N12.48m, while Adamawa State has the lowest proportion of amount borrowed from the scheme at N700,000 between January and August this year.

But Bauchi, Borno and Jigawa states did not participate in the scheme between January and August 2017.

Loans fully repaid analyzed by state between January and August, 2017, revealed that in first quarter of 2017, N1.4bn was repaid and increased to N1.5bn in second quarter.

A total of N3.7bn has been repaid between January and August, 2017, data by CBN revealed.

Meanwhile, for the month of August, a total of 3,571 farmers benefited N463m for its ACGS in 29 states.

Data obtained revealed that Oyo State , followed by Edo and Taraba states had the highest proportion of amount borrowed in August while Bayelsa and Abia states had the lowest amount accessed on the CBN’s Agriculture Scheme.

Specifically, Oyo State farmers were granted N65.16m, while farmers in Edo and Taraba states accessed N45.42m and N42.22m from the Agriculture Scheme respectively.

Bayelsa State farmers were granted N50,000 while Abia farmers were granted N250,000 in August.

For the month of August, the following States, Adamawa, Bauchi, Borno, Imo, Jigawa, Katsina, Lagos and Yobe did not access the Agricultural Credit Guarantee in August, 2017.

The data by apex bank revealed that Plateau and Enugu had 133 and three informal group of farmers that access the CBN’s ACGS in month under review, respectively.

According to CBN data, a total of 2677 male famers accessed N352m; while 1026 female farmers in 29 states were granted N107.5m.

Motolani Oseni