NIGERIA – The Federal Government of Nigeria has raised the share capital of the Agricultural Credit Guarantee Scheme (ACGSF) to N50bn (131.2m) from N3bn (US$7.8m) to bolster agricultural chain financing in the country.
ACGSF Fund guarantees credit facilities extended to farmers by banks up to 75% of the amount in default net of any security realized.
The Fund is managed by the Central Bank of Nigeria, which handles the day-to-day operations of the Scheme.
Nigeria’s Central Bank also provides Guidelines that stipulate the eligible enterprises for which guarantees could be issued under the Scheme.
The new increased funding to the scheme follows a 2019 amendment to the to the ACGSF act to allow for a complete agricultural value chain financing in order to boost the country’s agricultural sector.
Under the new guidelines, the maximum for non-collaterised loan under the ACGSF Amendment Act 2019 is now N100,000 (US$262).
The amended act also increased the maximum amount for collaterised loan granted to individuals, cooperative societies and corporate entities to N50m, up from N10m (US$26,246).
The ACGSF Amendment Act 2019 also includes the financing of production farm machinery, the implementation and equipment for production, processing, storage and transportation.
The Act aimed to amend the ACGSF fund Act Cap. A11 laws of the federation of Nigeria, 2004.
This would allow for an enhanced the capital base and support an expanded coverage of the scheme.
It also increased the size of the loanable fund, increase membership and give more powers to the board and for related matters.
The ACGSF was established by Decree No. 20 of 1977, and started operations in April, 1978.
Its original share capital and paid-up capital were N100 million (US$262k) and N85.6 million (US$224.6m), respectively.
The paid-up capital was increased to N3 billion (US$7.8m) in 2001 and how now been further increased to N50 billion (US$131.2m) to enable the fund better finance the agricultural value chain in the country.
The Federal Government holds 60% and the Central Bank of Nigeria, 40% of the ACGSF shares.
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