The Central Bank of Nigeria (CBN) has so far released a total sum of N501.697 billion under the commercial agriculture credit scheme (CACS).
Information obtained from the bank by a reporter showed that the fund was deployed to boost 526 agriculture projects across the country.
The document also showed that total repayment under the scheme was N251.156 billion in respect of 526 projects, out of which 281 projects had fully been repaid as at the end of September 2017.
It was gathered that outstanding balance with lending banks was N250.541 billion as at September 30, 2017.
The CACS was established by the federal government and is financed from the proceeds of the N200 billion three-year bonds raised by the Debt Management Office (DMO).
The fund is made available to participating banks to finance commercial agricultural enterprises. Speaking with a correspondent on the sidelines of a three-day workshop for CACS agriculture desks officers of commercial banks in Lagos organised by the Nigeria Agriculture Insurance Corporation (NAIC), project management officer of the CBN, Mr. Ademuyiwa Adeleke, expressed worry about frequent abuse and negligence of laid down policies and CACS guidelines.
Adeleke disclosed that banks have flouted repatriation of loans and often failed to carry out due diligence of projects before disbursement of loans.
He warned that CBN would not hesitate to apply appropriate sanctions against banks that fail to observe due process. In her opening remarks, the managing director of NAIC, Folashade Joseph, said the deposit money banks and other financial institutions have been NAIC's major distribution channel over the years.
Joseph said the deposit money banks serve as credit providers, while NAIC acts as risk management service provider. According to her, NAIC as a major stakeholder in the Central Bank of Nigeria CACS' initiative has repositioned itself to improve on its product offerings and services with a vision of "remaining the pioneer and leader in the agro-investment risk management sphere" in Nigeria.
"Risk management remains an integral part of any modern day agricultural financing model, as such the Central Bank of Nigeria has deemed it fit to ensure that any agricultural investor accessing the CACS facility must have the project insured by NAIC as stated in the current lending guidelines for the CACS loan", she said.
This, Joseph noted, is to protect the project from failing due to unforeseen risks. She said, "This capacity building program is to enlighten the agricultural desk officers of banks on how to implement the risk management component of the CACS.
"Furthermore, NAIC is committed to forging the appropriate partnerships with deposit money banks in the fulfillment of their mandate by the provision of the appropriate risk management services to the agricultural investors being financed by the banks".