To date, the Central Bank of Nigeria (CBN) and the Federal Government have guaranteed a total of N129.084 billion in agriculture loans to Nigerian farmers through the Agricultural Credit Guarantee Scheme Fund (ACGSF).
Mr. Stephen Okon, Chairman of the ACGSF Board, stated at the ACGSF 39th Board meeting with stakeholders on the new ACGSF Guidelines and Operations and the 2021 ACGSF Best Farmers Awards, that ACGSF was established by Decree No. 20 of 1977 to guarantee agricultural credit facilities granted to farmers. The Federal Government and the Central Bank of Nigeria contribute 60% and 40%, respectively, to the fund.
He explained that the CBN, on the other hand, serves as the scheme’s managing agent as well as the Fund’s secretariat, which encourages deposit money banks to lend to those engaged in agriculture by providing guarantees and mitigating risks associated with banks’ lending to agriculture; by guaranteeing to pay banks 75.0 percent of the net amount in default in accordance with the provisions of the enabling Act.
“The ACGSF scheme has proven relatively successful in de-risking Nigeria’s agricultural sector, as evidenced by the number of loans guaranteed from inception to date,” Okon added. From commencement until February 2022, a total of 1,224,795 loan beneficiaries worth N129.084 billion were guaranteed. It is worth noting that Cross River State guaranteed a total of 73 loan beneficiaries under the plan totaling N24.300 million from January to February 2022. This brings the total amount of guaranteed loans in Cross River State from the scheme’s start in 1978 to February 2022 to 18,406, valued at N2.305 billion.”
Mrs. Glory Iniunam, the CBN Calabar branch Controller, told reporters that farmers were encouraged to take out loans and that “when you take out a loan and pay it back, you get a reward.”