Through the Agricultural Credit Guarantee Scheme Fund (ACGSF), the Central Bank of Nigeria (CBN) has disclosed plans to increase its credit guarantee to small scale farmers. The development was revealed by Mrs. Olubunmi Siyanbola, the ACGEF Chairman at the strategic retreat by stakeholders in Lagos.
According to Siyanbola, the scheme which offers credit guarantee for risks by giving loans to small farmers, presently at 100,000 naira, is too low, saying that part of the discussions at the retreat was also to review the intervention.
She said “there is crucial need for us to do all that it takes to take care of those who actually constitute the growth of the agricultural sector towards its huge contribution to economic development towards this nation which are the peasant farmers. There is the need for us to enable them to access the finance so that they could do more to ensure food stability in the country”.
The chairman revealed that the fund has existed for 40 years but noted that there have been challenges. She said “the Fund has been in existence for 40 years and continues to gain attention as evidenced by the increasing on-going debate over its relevance due to the declining traction among banks”.
She added that “more importantly, there have been attempts to review the main contextual issues in the operability of the fund in the 21st century, but these attempts have been delayed by the non-constitution of the board until 2018, since its dissolution in 2007 by the federal government”.
Siyanbola revealed that “the maximum loan amount guaranteed under the Fund for the different categories of farmers, that is, individual, corporate bodies and cooperative societies, respectively, has lost value due to the rising costs of goods and services coupled with the dynamics of the macroeconomic situation of the economy”.
She however admitted that inspite of the challenges, the fund has helped address some of the issues regarding financial access among agro-preneurs in Nigeria.
The chairman noted that the challenges suggest “a lot more work needs to be done to reposition the Fund in the right pedestal for agricultural development”.