The Central Bank of Nigeria (CBN) has put the total amount disbursed to beneficiaries under the Commercial Agriculture Credit Scheme (CACS) as at the end of the first quarter 2014 at N228.093 billion.

The central bank disclosed this in its Development Finance Department (DFD) report for January- March 2014. According to the report, the amount was utilised for 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.

It also showed that 30 state governments and the Federal Capital Territory accessed the sum of N39 billion from CACS fund from inception to March, 2014, while N1.304 million was recorded as repayments by four banks in respect of five projects during the period under review, bringing the total fund repaid to N32.928 billion in respect of 68 expired projects.

Therefore, the balance of CACS receivable account fund as at the end of March, 2014 was N169 million, while the balance in the CACS repayment account stood at N4.665 billion.

“From inception in 2009 to March 2014, 165,510 jobs were created; two out of the 269 private projects are owned and managed by women,” it explained.

Under the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), 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 IDP claims paid under NIRSAL to N124.769 million in respect of 22 projects.

The 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.

Some of the challenges encountered during the period included the validity of information provided by counter parties for CRG, review of the existing CRG guidelines to reflect the 12.5 per cent first loss principle in place of the face value currently being issued; and the low public awareness and poor perception of NIRSAL

Going forward, the central bank among other things, assured stakeholders that guarantee would be extended only to projects with fixed value chain.

Also, it put total loans guaranteed under the Agricultural Credit Guarantee Scheme (ACGS) as at the end of the first quarter at N957.32 million, adding that four DMBs and 12 microfinance banks benefitted from the scheme.