Banks’ lending to farmers under the Central Bank of Nigeria’s (CBN) Agricultural Credit Guarantee Scheme (ACGS), fell by eight percent to N3.7 billion in the eleven months ending in November 2019.
In the Central Bank of Nigeria (CBN) Monthly Economic Reports, it showed that the value of banks’ loans to farmers under the scheme dropped by eight percent to N3.7 billion in the eleven months ending November 2019 from N4.2 billion in the eleven months ending November 2018.
Similarly, the number of banks’ loans guaranteed by the CBN under the scheme dropped by 5.2 percent, to 26,915 in the eleven months ending November 2019 from 28,398 loans in the same period of 2018.
The ACGS Fund was established in 1977 with share capital and paid-up capital of N100 million and N85.6 million, respectively.
The capital base of the scheme was increased to N3 billion in March, 2001. Under the scheme, the CBN guarantees credit facilities extended to farmers by banks up to 75 percent of the amount in default net of any security realized.
Year-on-year analysis of the agricultural sub-sectors that benefited from the scheme showed that banks’ credit to food crops sub-sector grew by 12 percent, (y/y) to N182.55 million in November 2019 from N163.75 million in November 2018.
The data also showed that banks’ credit to livestock subsector rose by 33 percent, (y/y) to N84.36 million in November 2019 from N63.65 million in November 2018.
Credit to fishery subsector under the scheme increased by 117 percent to N34.39 million, (y/y) in November 2019 from N15.82 million in November 2018.
The report also showed that credit to other sub-sectors grew by 120 percent, (y/y) to N18.95 million in November 2019 from N8.60 million in the corresponding period of 2018.
However, credit to mixed crop and cash crop sub-sectors dropped during the review period. Vanguard’s analysis indicated that credit allocated to mixed crop sub-sector declined by 66 percent, y/y, to N31.92 million in November 2019 from N92.62 million in November 2018.
Credit to cash crop farmers also dropped by 45 percent, y/y, to N36.07 million in November 2019 from N65.5 million in November 2018.
In its November 2019 economic report, the apex bank stated: “The ACGS guaranteed a total of N388.22 million to 2,125 farmers in November 2019.
“The amount represented a decrease of 0.5 percent and 5.3 percent below the levels in the preceding month and the corresponding period of 2018, respectively.
“Sub-sectoral analysis showed that food crops obtained the largest share of N182.55 million (47 percent) guaranteed to1,127 beneficiaries, followed by livestock sub-sector, N84.36 million (21.7 percent) guaranteed to 351 beneficiaries; and cash crops, N36.07 million (9.3 percent) guaranteed to177 beneficiaries.
“Fisheries, mixed crops and others obtained N34.39 million (8.9 percent), N31.91 million (8.2 percent) and N18.95 million (4.9 percent) guaranteed to 103,279 and 88 beneficiaries, respectively.
“Analysis by state showed that 28 states, including the FCT, benefited from the Scheme in November 2019, with the highest and lowest sums of N67.49 million (17.4 percent) and N1.24 million (0.3 percent) guaranteed to Ogun and Jigawa states, respectively.”
Source: VON
