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The Central Bank of Nigeria (CBN) has so far released N88.53 billion under the Commercial Agriculture Credit Scheme (CACS).

According
to information posted on its website, out of 367 projects bids
submitted by the banks, only 91 have so far been considered as eligible
under the scheme.

“Since
inception of the scheme, the CBN has released the sum of N88.533
billion for disbursement to 79 projects/promoters and 12 State
Governments,” according to the statement.

This
is out of 337 projects and 30 state governments that applied. Total
undisbursed funds under the scheme, as at September 30, is N111.467
billion.

In
September, under the 2nd tranche, the state governments accessed N1
billion each for on-lending to farmers’ co-operatives and other areas
of agricultural interventions in their various states. The states are
Adamawa, Bauchi, Enugu, Gombe, Kebbi, Kogi, Kwara, Nassarawa, Niger,
Ondo, Taraba, and Zamfara. The funds were accessed through four banks
namely Fidelity Bank, Union Bank, UBA, and Zenith Bank.

In
August, nine state governments namely Adamawa, Bauchi, Gombe, Kebbi,
Kogi, Nasarawa, Ondo, Zamfara, and Niger accessed N1.00 billion each
for on-lending to cooperative farmers and unions in their various
states. Adamawa and Kebbi States accessed the funds through Zenith
Bank, Gombe and Niger States through Union Bank, while the five
remaining states were funded through UBA.

The
CBN also withdrew a total of N9.2 billion comprising N7.003 billion
from UBA, N581 million from GTB Plc, and N1.60 billion from First Bank,
as undisbursed funds to 11 projects from UBA and 1 project each from
GTB and FBN Plc during the second tranche.

Funding initiative

These
disbursements are part of the N200 billion agriculture credit fund
initiated by the Central Bank last year to boost commercial
agricultural enterprises in Nigeria. The purpose of the fund is to fast
track agricultural development in the country by providing credit to
commercial agricultural enterprises at a single digit interest rate.

It
is expected to enhance food security, reduce cost of credit in
agricultural production, and increase output and employment in the
sector. Target commodities under the scheme include the cultivation of
target crops (rice, cassava, cotton, oil palm, wheat, rubber, sugar
cane, fruits, and vegetable); livestock (dairy, poultry, piggery); and
fisheries.

According
to the CBN, 11 banks have been involved in the disbursement of the
funds across to farms and agro allied businesses as at September,
namely Access Bank, which disbursed N4.2 billion; Fidelity Bank, N1.5
billion; First Bank, N4.9 billion; Guaranty Trust Bank, N4.25 billion;
Oceanic Bank, N2 billion; Skye Bank, N7.6 billion; Stanbic IBTC, N450
million; Union Bank, N7.3 billion; United Bank for Africa, N38 billion;
Unity Bank, N5.5 billion; and Zenith Bank, N12.8 billion.

Eligibility

By
the eligibility guideline released by the Central Bank, borrowers under
the scheme shall be a limited liability company, with asset base of not
less than N350 million, and with prospect to grow the net asset to N500
million in the next three years and comply with the provision of the
Company and Allied Matters Act (1990).

Such
companies must also have a clear business plan, provide up-to-date
record on the business operation, if any, and satisfy the entire
requirement specified by its lending bank.

The
loan has a maximum tenor of seven years and/or working capital facility
of one year, with provision rolls over, while the scheme allows for the
moratorium in the loan repayment schedule.