The agriculture credit loan is a bank-guaranteed credit facility that extends up to 75% of the amount in default, net of any security realized, to farmers. The credit loan is managed by the Central Bank of Nigeria, which is also in charge of the Scheme’s day-to-day operations. The Guidelines define the types of businesses that are eligible for guarantees under the Scheme.
The CBN Agriculture Credit Loan’s Objectives
- To accelerate the development of the Nigerian economy’s agricultural sector by providing finance to commercial agricultural firms at a single-digit interest rate;
- Improve national food security through increasing food supplies and lowering agricultural produce and product prices, resulting in low food inflation;
- Reduce the cost of finance in agricultural output to allow farmers to fully utilize the sector’s potential;
- On a long-term basis, boost output, create jobs, and diversify revenue streams, increase foreign exchange earnings, and offer input to the industrial sector.
For the CBN Agriculture Credit Loan
This CBN Agriculture Credit Loan is primarily aimed at agricultural commodities and value chains in order to cover the most important agricultural commodities.
Corporate and Large-Scale Commercial Farms/Agro-Enterprises
Limited liability company with a minimum asset base of N100 million and the potential to develop its net asset to N250 million in the next three years while adhering to the Company and Allied Matters Act (1990);
- Have a well-thought-out business strategy.
- If there are any, provide up-to-date records on the business activity.
- Where applicable, have an out-growers program.
- Comply with all of the lending bank’s standards.
Medium-Scale Commercial Farms/Agro-Enterprises
The borrower must meet the following requirements in order to participate in the CBN Agriculture Credit Loan:
A limited liability company with a minimum asset base of N50 million and the potential to develop its net asset to N150 million in the next three years that complies with the Company and Allied Matters Act (1990).
- Have a well-thought-out business strategy.
- Maintain up-to-date records on the company’s operations.
- Where applicable, have an out-growers program.
- Comply with all of the lending bank’s standards.
Instructions on How to Apply for a CBN Agriculture Credit Loan
- All CBN Agriculture Credit Loan applications must be submitted to participating banks. Participating banks are required to treat all Scheme applications with due diligence.
- The Loans will have a maximum tenor of one year, based on the enterprise’s gestation period/or working capital facility, with rollover provision.
- The CBN Agriculture Credit Loans program allows for a pause in the loan repayment schedule, taking into account the enterprise’s gestation period.
For further information, you can obtain a PDF copy of the CBN Agriculture Credit Loan guidelines.
Source: Nyscinfo