CBN Invests In Agricultural Sector
The Central Bank of Nigeria (CBN) has continued to invest in the agricultural sector. It released about N19.9 billion under the Growth Enhancement Scheme (GES)’s Credit Risk Guarantee (CRG) which is meant to boost agriculture financing in the country.
The apex bank however did not approve any Growth Enhancement Scheme (GES)’s Credit Risk Guarantee (CRG) in the months of January to March, 2014.
The Central Bank in its Development Finance Department (DFD) report for January- March 2014 disclosed that the sum of N134.61million was paid to 61 projects under the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in the first quarter of this year.
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) is a mechanism designed to provide farmers with affordable financial products, reduce the risk of financial institutions that grant them loans, build capacities of banks to lend to agriculture, as well as develop an incentive mechanism for Nigerian banks based on their commitment to agricultural financing.
The report showed that one Credit Risk Guarantee (CRG) valued N2 billion was issued during the review period. That took the total value to N16.272 billion in respect of 45 CRG cover issued from inception to date.
On the other hand, seven Interest Drawback Programme (IDP) claims valued at N57.250 million were processed and paid during the review period under the NIRSAL. That made the total Interest Drawback Program (IDP) claims paid under NIRSAL to N124.769 million in respect of 22 projects.
The apex bank’s Development Finance Department report on the Commercial Agriculture Credit Scheme (CACS), revealed that from inception in 2009 to March, 2014 that the sum of N228.093 billion has so far been released to the economy under the Commercial Agriculture Credit Scheme in respect of 299 projects.
The CACS was established to finance large ticket projects along the agriculture value chain. The scheme is being administered at a single digit rate of nine per cent to beneficiaries for a period of seven years. State governments, including the FCT can access a maximum of N1 billion each for on lending to farmers’ cooperatives or other areas of agricultural intervention.
A breakdown of the amount showed that it comprised N199.831 billion released from the CACS receivable account for 273 projects and the sum of N28.262 billion released from repayment account.