CBN Agricultural Loan 2019: What You Need To Know
If you are looking for how to apply for the CBN agricultural loan for the year 2019, then here you have it. All in the bid to support and promote agricultural businesses in Nigeria, the Central Bank of Nigeria (CBN) have different agricultural credit scheme for you. There are things you need to know about the CBN Agric loan 2019 that this article provides simply for you. So, the problem is no longer about the capital to start your business but rather your inability to get the right information.
CBN Agricultural Loan 2019 For Nigerian Farmers
Below are the agricultural credit schemes that the Central Bank of Nigeria (CBN) has put in place for Nigerian farmers.
Agricultural Credit Guarantee Scheme Fund (ACGSF)
This particular scheme was established since 1978 and it has been supporting agricultural entrepreneurs in Nigeria. The scheme guarantees credit facilities that are given to farmers by banks up to 75% of the amount. You can obtain forms for this scheme from various branches of participating banks throughout Nigeria. In fact, virtually all the commercial banks in Nigeria partner with the CBN under the ACGSF.
It is so easy that all you need to do is discuss your proposal with your bank, and then complete all necessary application forms to this regard. You will provide information like the size of your farm, project cost, your financial disposition, the expected output returns from your farm, and the profit potential of your project as well.
There is no limit to the number of times you can take part in this agricultural credit guarantee scheme fund. You only need to make sure that you maintain a very good track record of loan repayment with your bank. Over the years, 90% of the beneficiaries of the CBN agricultural loan especially under ACGSF have been small farmers. So, you don’t really need to have tens of hectares of farmland to benefit.
Under the ACGSF, you can obtain N1 million and N10 million as an individual and cooperative society respectively, provided you have collateral.
Requirements for benefiting from the ACGSF
There are certain criteria that you must meet in order to access the CBN agricultural loan under ACGSF. First, you must be a farmer and that is the major requirement. If you are seeking a loan of N20, 000 then you wouldn’t need to present collateral provided you are supported by a personal guarantee from a reputable person in your community.
If you want a loan that is above N20, 000 then you would need to present collateral either in tangible form or 25% cash security of the intended cash amount. Your collateral can also be cash in the bank, stock or shares, life insurance policies, landed properties, and any other item that is acceptable by the lending bank.
How to obtain your ACGSF loan
As a farmer that wants to apply for the CBN agricultural loan under ACGSF, you will have to open an account with any of the commercial banks in Nigeria that operate the AGCSF. After that, you should request the ACGS application form, then complete and return it to the bank. Remember that you would need to provide collateral for the loan required, except where the loan does not require collateral. Also, you need to have an insurance cover from the Nigerian Agricultural Insurance Corporation (NAIC).
The agricultural activities that qualify for guarantee under the ACGSF
For your agricultural activity to be eligible for the guarantee under the Scheme, it must be one or a combination of the following:
- The establishment or management of the production of rubber, oil palm, cocoa, coffee, tea, and similar crops in that category.
- The cultivation of cereal crops, shea nuts, benniseed, vegetables, pineapples, banana, plantain, fruits, and tubers.
- Animal husbandry like cattle rearing, fishery, poultry, and the likes.
- General processing where it is combined with at least 50% of farm output. Examples include the processing of cassava to garri, oil palm to palm oil and kernel, groundnut to groundnut oil.
The Commercial Agriculture Credit Scheme (CACS)
This is another CBN agricultural loan that you can apply for in 2019, especially if you are a large scale production farmer. The CACS has been in operation in Nigeria since 2009 with the sole aim of providing finance for Nigeria’s agricultural value chain. Well, the fear of lack of capital is very much misplaced, especially with what the information you get here.
This scheme provides finance for the agricultural value chain from production to processing, storage, and marketing. The CBN agricultural loan 2019 under CACS has its primary objectives as listed below:
- To improve the development of Nigeria’s agricultural sector by providing credit facilities to large-scale commercial farmers. This loan comes with a single digit interest.
- Enhance national food security in Nigeria by effecting lower agricultural produce and products prices as well as increasing food supply. By so doing, the scheme promotes low food inflation.
- To help reduce the cost of credit in agricultural production. This is to help you exploit the untapped potential in the agricultural sector.
- The scheme also aims to increase agricultural output and create employment opportunities for Nigerians. They also hope to raise the level of the foreign earnings of Nigeria by diversifying the revenue base.
For this CBN agricultural loan 2019, you can borrow from lending banks that include community banks at market-determined rates. This CBN agricultural loan is given to eligible entities at a maximum interest of 9 percent. You can see for yourself that there are lots of opportunities that you can seize in order to finance your agricultural business.
For more information on the CBN agricultural loan under the CACS scheme, you should see the Guidelines for Commercial Agricultural Credit Scheme. You should also visit the official website of the Central Bank of Nigeria (CBN) for details on the CBN agricultural loan 2019.
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