Business & Loans
CBN Opens Development Finance Offices To Move Loans Closer To Applicants
CBN Opens Development Finance Offices To Move Loans Closer To Applicants
The Central Bank of Nigeria (CBN) has disclosed that it has opened Development Finance Offices in all its branches across the nation to enable them to move the administration of the Agricultural Credit Guarantee Scheme (ACGS) closer to farmers.
CBN stated that the Development Finance Officers will be in charge of any matter connected to the Agricultural Credit Guarantee Scheme (ACGS). They will be able to treat matters in the state in which they are located unless banks are otherwise directed.
This is part of the new guidelines of the scheme, which was announced by the apex bank, yesterday.
You may also read 4 Key Steps of Getting a Small Business Loan Without Collateral
What Was Said By CBN
“Apart from the Head Office of the Central Bank of Nigeria, Development Finance Offices have been established in all branches of the Central Bank to administer the Agricultural Credit Guarantee Scheme. The Development Finance Offices are manned by Officers who function under the overall control of the Branch Controllers of the Central Bank in each branch.
“In order to ensure that matters connected with the Scheme are dealt with expeditiously, the Officers will treat such matters in the state in which they are located unless banks are otherwise directed.”
“The agriculture loans must be used for purposes for which they are obtained, as a diversion would attract a five-year jail term”.
“Revised Regulatory and Supervisory Guidelines of Microfinance Banks must be strictly adhered to as it stipulates that the maximum principal amount for a microloan should not exceed N500,000.00 or 1% of the shareholders’ fund unimpaired by losses”.
According to the new guidelines
“Banks should remind prospective borrowers under the Scheme that it is an offense for which one may be imprisoned for five years to apply the loan for purposes other than those for which they are given.”
It put a single obligor limit for non-tangible collateral at N100,000 “while the obligor limit for individual, group/co-operative, or a corporate society is N50,000,000.00 (Fifty million naira only) for secured loans.”
The bank said that based on the Act, the liability of the Fund will be 75 percent of the amount in default net of any amount realized by the bank from the security it got from the borrower, subject, in the case of a loan to an individual, a co-operative society or a corporate body, to a maximum of N50,000,000 (Fifty million naira only).
You may also read CBN Launches Loan Recovery Scheme Under Anchor Borrowers’ Programme
The Agricultural Credit Guarantee Scheme Fund was established by the Federal Military Government under the Agricultural Credit Guarantee Scheme Fund Decree 1977 (Decree No. 20) and as amended on 13th June 1988, and 26th June 2019.
The Act originally provided for a Fund of N100 million subscribed to by the Federal Military Government (60 percent) and the Central Bank of Nigeria (40 percent).
CBN Opens Development Finance Offices To Move Loans Closer To Applicants
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