Commercial Agriculture Credit Scheme (CACS) is N200 billion Fund established by the CBN and the Federal Ministry of Agriculture and Rural Development. The fund can be accessed by medium and large scale integrated and non-integrated agricultural projects with with a minimum of N50 million net asset base.
As part of its developmental role, the Central Bank of Nigeria (CBN) in collaboration with the Federal Ministry of Agriculture and Water Resources (FMA&WR) established the Commercial Agriculture Credit Scheme (CACS) in 2009 to provide finance for the country’s agricultural value chain (production, processing, storage and marketing). Increased production arising from the intervention would moderate inflationary pressures and assist the Bank to achieve its goal of price stability in the country. The primary objectives of the Scheme are to:
- Fast-track the development of the agricultural sector of the Nigerian economy by providing credit facilities to large-scale commercial farmers at a single digit interest rate;
- Enhance national food security by increasing food supply and effecting lower agricultural produce and products prices, thereby promoting low food inflation;
- Reduce the cost of credit in agricultural production to enable farmers exploit the untapped potentials of the sector; and
- Increase output, generate employment, diversify Nigeria’s revenue base, raise the level of foreign exchange earnings and provide input for manufacturing and processing on a sustainable basis.
The Scheme which is a sub component of the Federal Government of Nigeria’s Commercial Agriculture Development Programme (CADP) is financed through a N200billion Bond raised by the Debt Management Office (DMO). Loans to eligible entities under the Scheme are disbursed at a maximum interest of 9 percent. The subsidy arising from this stipulated rate and the market rate on all loans granted, and the administrative expenses of the Scheme are borne by the Central Bank of Nigeria (CBN).
The Central Bank of Nigeria and the Federal Ministry of Agriculture and Waters Resources jointly ensure that the scheme is implemented successfully. This is achieved through the Project Steering Committee (PSC) comprising the Honourable Minister of Agriculture and Water Resources (Chairman), the Governor of the Central Bank of Nigeria, Representatives of the Federal Ministry of Finance and Commercial Farmers, respectively and the Programme Coordinator of the Commercial Agriculture Development Programme. The day-to-day implementation of the Scheme is undertaken by a Technical Implementation Committee (TIC) made up of the Director of Development Finance Department, CBN as the Chairman, Head of Agricultural Credit Support Division, CBN and a Consulting Group as members, and the Programme Coordinator of the Commercial Agriculture Development Programme of the Federal Government as the Secretary.
CACS is operated in two tranches of N100billion each. The 1st Phase of the tranche ran from May to December, 2009, while the 2nd tranche commenced in February, 2010.
Detailed information on the operational modalities for the CACS are shown on the Guidelines for Commercial Agricultural Credit Scheme while the performance of the Scheme are indicated in the Monthly Report.
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