#237bn agriculture fund disbursed- CBN

The Central Bank of Nigeria (CBN) yesterday put the
cumulative amount of funds disbursed under the
Commercial Agriculture Credit Scheme (CACS) since
inception at N236.969 billion.
The CBN stated this in its Development Finance Department
(DFD) report on the activities of the business unit as at
July. According to the banking sector regulator, the amount
was in respect of 313 projects.
The CACS was established to finance large ticket projects
along the agricultural value chain. The scheme is being
administered at a single digit rate of nine per cent to
beneficiaries for a period of seven years, which has been
extended to 2025.
The balance on CACS fund as at end of July was N0.169
billion, while balance on CACS repayment account as at end
July, 2014 was N3.662 billion.
"No bank was sanctioned for infraction on the CACS
guidelines during the month. However, the total penalty
charged for infractions, stood at N1.242 billion from
inception in 2009 to July, 2014," it added.
The central bank stated that the fund disbursed through 20
banks made up of N199.831 billion from CACS receivable
account for 273 projects and N37.138 billion from CACS
repayment account.
The report also put funds disbursed under the Nigeria
Incentive-based Risk Sharing System for Agricultural
Lending (NIRSAL) as at July 2014 at N29.064 billion. This,
the central bank explained in respect of 158 projects.
The NIRSAL is a mechanism designed to provide farmers
with affordable financial products and reduce the risk of
exposure of financial institutions that lend to the sector. It
is also expected to build the capacities of banks to lend to
agriculture as well as provide incentives for those that are
financing the sector.
According to the report, no Credit Risk Guarantee (CRG)
was issued during the month. Furthermore, it stated that
cumulatively, 46 CRG cover valued N16.280 billion were
issued from inception to date.
In addition, it showed that the central bank organised a
stakeholders' meeting between Bankers, Cocoa Farmers
Association of Nigeria (CFAN) and off-takers (Armajaro,
Yero International, Olam, etc) at Akure in the month under
review, to anchor financing relationship between the
lenders, borrowers and off-takers.
Commenting on the challenges faced during the period,
report noted the validity of information provided by counter
parties for credit risk guarantee, low public awareness and
poor perception of NIRSAL, amongst others. Going forward,
the central bank stated that guarantee would be extended
only to projects with fixed value chain.