House of Representatives has expressed support for the legal framework that “seeks to set up the commercial agricultural credit scheme at single interest rate.”
Provision of the bill, which was transmitted by the Senate to the House for concurrence said each state of the federation and Federal Capital Territory can access up to N5 billion, not exceeding 5 percent interest rate.
During the clause-by-clause consideration of the report at the Committee of the Whole, the lawmakers noted that the bill when assented by Mr. President would complement ongoing diversification of the economy and boost agro-allied businesses across the country.
The bill which passed through third reading, also seeks to ensure provision of credit support for production, storage and processing of target commodities, develop market and agricultural enterprises and for other related matters.
It stipulates that “the scheme shall be funded by the Federal Government of Nigeria and Central Bank of Nigeria in the ratio of 60:40 and each shall meet its full contribution in two years from the date of the Act.”
Other provisions show that the day-to-day implementation of the fund, which shall be managed by the Development Finance Department of the Central Bank of Nigeria (CBN) and Commercial Agriculture Development Programme (CADP) Secretariat of the Federal Ministries of Agriculture Development and Water Resources and report to the project management committee.
The bill also empowers Deposit Money Bank (DMB) operating in the country that meets the disbursement criteria established by the project management committee and has relevant experience in agricultural lending to administer the fund.
It further provides that any of the state governments intending to access the fund must establish specialised agencies or secretariat for the purpose of on-lending such funds to cooperative unions, cooperative societies, self-help groups and agricultural commodities association in their respective states.
Also borrower under the scheme like integrated large-scale farm or agro-based enterprise with agricultural asset (excluding land) of not less than N100 million with prospects of growing the assets to N250 million within the next three years.
However, non-integrated commercial farm/agro enterprises with assets not less N50 million with prospects of growing the assets to N150 million expect in the case of on lending to farmers’ cooperative societies.
The bill, which was considered at the Committee of the Whole chaired by Yussuff Lasun, deputy speaker, scaled through third reading.
The bill sought to provide a regulatory framework for the agricultural credit fund to promote commercial agriculture in Nigeria, ensure credit support for production, storage and processing of target commodities, develop market and agricultural enterprise and other related matters.
The scheme is also to complement other special initiative 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 scheme among others.
