CBN extends CACS to non interest financial institutions
by HOPE MOSES-ASHIKE
February 20, 2018 | 8:44 pm| | | Start Conversation
The Central Bank of Nigeria (CBN) on Tuesday reviewed the guidelines for Commercial Agriculture Credit Scheme (CACS) to include the non interest financial institutions.
The review is part of the CBN’s efforts to deepen access to finance and reduce exclusion rates. “It is expected that the review of the guidelines for other intervention funds would follow in due course”, Kevin Amugo, director, financial policy and regulation department, said in a circular to all banks and other financial institutions.
CACS was established by the CBN in collaboration with the Federal Government of Nigeria, represented by the Federal Ministry of Agriculture and Rural Development (FMARD) to promote commercial agricultural enterprises in Nigeria, which is a sub–component of the Federal Government of Nigeria Commercial Agriculture Development Programme (CADP).
The Fund complements other special initiatives of the Central Bank of Nigeria in providing concessionary funding for agriculture such as the Agricultural Credit Guarantee Scheme (ACGS) which is mostly for small scale farmers, Interest Draw-back Programme, Agricultural Credit Support Scheme and other similar development initiatives.
The guidelines stated that the scheme shall be financed from the proceeds of the N200billion three year bond raised by the Debt Management Office (DMO). The fund shall be made available to the participating bank(s) to finance commercial agricultural enterprises.
One of the objectives of the scheme is to fast track development of the agricultural sector of the Nigerian economy by providing credit facilities to commercial agricultural enterprises at a single digit interest rate.
Also, the scheme enhance national food security by increasing food supply and effecting lower agricultural produce and product prices, thereby promoting low food inflation; reduce the cost of credit in agricultural production to enable farmers exploit the potentials of the sector; and increase output, generate employment, diversify the revenue base, increase foreign exchange earnings and provide input for the industrial sector on a sustainable basis.
Big Read |