N200bn agric fund: CBN sanctions bank for contravening guidelines

[MrVan]

By Babajide Komolafe

LAGOS — The Central Bank of Nigeria, CBN, has sanctioned Stanbic IBTC Bank for contravening the guidelines of the N200 billion Commercial Agricultural Credit Scheme, CACS.

"In the period under review, N470 million was withdrawn from Stanbic IBTC Bank in respect of Albookys Nigeria Ltd. due to contravention of the CACS guidelines. The bank was sanctioned with a penalty charge of N47.708 million", the CBN said in its performance of the scheme for March 2012.

The report said: "During the period, Abia State Government accessed N1.0 billion while Rivers and Bauchi State governments accessed additional N3.0 billion and N1.0 billion respectively from the CACS fund. The number of state governments participating in the scheme, therefore, stands at 29. These state governments accessed funds for on-lending to farmers' unions, co-operatives and financing of other areas of agricultural interventions in their various states."

On actual releases of funds by the CBN to banks, the report said: "During the period under review (March 2012), N10.71 billion was released to six banks with respect to 18 CACS projects, bringing total releases by the CBN since inception in 2009 to N175.525 billion.

"From inception to date, 18 banks, namely, Access, Fidelity, FirstBank, Guaranty, Ecobank, Diamond, Sterling, Citibank, Wema, Mainstream, Enterprise and FCMB participated under the scheme.

"Since inception in 2009, the CBN has released N175.525 billion for disbursement to 222 beneficiaries made up of 193 private promoters and 29 state governments that accessed N33.0 billion.

"The analysis of number of projects financed under CACS by value chain showed that of the 195 CACS private sector sponsored projects, production accounted for 47 per cent and dominated the activities funded while processing accounted for 39 per cent. These activities were distantly followed by marketing, storage and input supplies which registered 8 per cent, 5.9 per cent and 1.0 per cent respectively.

"With regards to the value of funds released, processing accounted for 52 per cent followed by production which accounted for 45.6 per cent of the value of enterprises financed. These were followed by marketing, storage and input supplies which registered 15.31 per cent, 5.9 per cent and one per cent. "

The CACS was designed to promote commercial agricultural enterprises through provision of long term loans with concessionary interest rates. It was also aimed at enhancing food security by increasing food supply and effecting lower agricultural produce and product prices.

The scheme is funded by the Federal Government from the proceeds of a N200 billion Federal Government  bond issued by the Debt Management Office (DMO) for this purpose.

Vanguard Nigeria