ACGSF: CBN, FG Guarantees Loans with N129bn

Bassey Inyang in Calabar

The board chairman of the Agricultural Credit Guarantee Scheme Fund (ACGSF), Mr. Stephen Okon, yesterday in Calabar, disclosed that a total of N129.084 billion had been provided by the Central Bank of Nigeria (CBN) and the federal government in guaranteeing 1,224,795 loans since the inception of the fund up to February 2022.
Making the disclosure while presenting his address at the opening session of a meeting with the board members of the ACGSF and stakeholders, Okon said the federal government contributes 60 per cent of the funds while the CBN contributes 40 percent.

The ACGSF was established by Decree No. 20 of 1977 to guarantee agricultural credit facilities granted to farmers.
The federal government and the CBN both contribute to the fund in the ratio of 60 per cent and 40 per cent respectively. The CBN however doubles as the managing agent of the Scheme and the Secretariat of the ACGSF.
The ACGSF encourages Banks to lend to those engaged in agriculture by providing guarantee.

The scheme mitigates risks associated with banks’ lending to agriculture by guaranteeing to pay banks 75 per cent of the net amount in default in accordance with the provisions of the enabling Act.
Okon said, “the fund provides guarantee in respect of loans granted by any bank for agricultural purposes with the aim of increasing the level of bank credit to the agricultural sector, adding that, “Loan” under the decree includes advances, overdrafts and any credit facility.”

He said from the outlined figures, “Cross River State from January to February 2022 has guaranteed a total of 73 loan beneficiaries under the scheme, valued N24.300 million,” bringing “the total guaranteed loans in Cross River State from inception of the scheme in 1978 to February 2022 to 18,406, valued N2.305 billion.”
Okon said in terms of loan recovery, 10,635 loans valued at N1.065 billion were repaid under the scheme in Cross River State from the inception.

He said the records speak volumes of the level of commitment of the officers in the state, and the determination of the farmers to utilise the opportunities offered by the scheme to empower themselves and improve their lot.
Okon said the ACGSF has proved relatively successful in de-risking the agricultural sector in Nigeria as evidenced in the number of loans guaranteed from inception to date.

Speaking on the importance of the meeting. Okon said the objective was, “to create awareness on the recently amended Act of the ACGSF and provide a platform for brainstorming by Board members, Participating Financial Institutions and the Stakeholders towards improving the delivery of the objectives of the scheme.”
He said in response to the challenges to food insecurity occasioned by Covid-19, the federal government and the CBN as well as other Development Finance Institution have continued to develop and implement policies aimed at promoting food sufficiency in the nation.