The document discusses credit guarantee schemes (CGS) and the experiences of CGS in Nigeria. It provides context on Nigeria's economy and agriculture sector. It then describes the financial risks in agricultural lending that discourage banks from lending to agriculture. To address this, the Central Bank of Nigeria established several CGS programs, including the Agricultural Credit Guarantee Scheme Fund (ACGSF), which began in 1978 and guarantees 75% of loans for agricultural purposes. The document outlines the objectives, operations, and impacts of the ACGSF and other CGS established by the Central Bank of Nigeria to facilitate agricultural financing.

1. By
Uzoma F. Onuoha
Head, Agric. Credit Support Division
DEVELOPMENT FINANCE DEPARTMENT
CENTRAL BANK OF NIGERIA ABUJA
A Paper Delivered at the African Rural and Agricultural Credit Association
(AFRACA) International Conference on Revolutionizing Finance for Agriculture,
Nairobi, Kenya (July 14th -18th , 2014)
Credit Guarantee Schemes:
Experiences and Lessons from
Nigeria

2. |
OULTLINE
1
• Introduction
• Financial Risks in Agricultural Lending
• Consequences of Bank’s perceived Risk in Agriculture
• What are Credit Guarantee Schemes
• Categories of CGSs
• Credit Guarantee Schemes of the Central Bank of Nigeria
o Agricultural Credit Guarantee Scheme Fund (ACGSF)
o Nigeria Incentive-Based Risk Sharing System for Agricultural Lending
(NIRSAL)
o The Small and Medium Enterprises Credit Guarantee Scheme (SMECGS)
• Other Institutions involved in Credit Guarantee in Nigeria
• Challenges of CGSs in Nigeria
• Way Forward

3. |
1
2
INTRODUCTION: NIGERIA AT A GLANCE
Sources:
Central Bank of Nigeria
National Bereau of Statistics
EfinA
Population 168.3 million
GDP Growth Rate 7.41%
Inflation Rate 8%
Nominal GDP $509,970.14
GDP Per Capita $2,921.45
Financial Exclusion rate 39.7%
Life Expectancy at birth 47.6 years
Incidence of Poverty 72.6%
Unemployment Rate 25.7%
Agriculture 21.40%
Industry 26.37%
Services 52.23%
SECTORAL CONTRIBUTIONS TO GDP

4. | 3
Agriculture represents an important part of Nigeria’s economy,
accounting for 60% of employment and 21.4% of GDP …
SOURCE: FAO Stat; CBN; Press research; team analysis
42
58
99
Agriculture
Other
Exports2
1
GDP
21.4.
Employment
60
1 Working population
2 Trillion
3 Productivity measured as output per worker. Productivity in Nigeria in 2007 was US$1,500 for agriculture, compared to US$2,600 for other sectors.
AGRICULTURE IN NIGERIA
Share of agriculture in production, employment and exports, 2013
Percent
100% = 98 m1 N 24.3 tr2 N 3.2 tr2
5
95
40
78.6
Nigeria has the capacity to
unleash its agricultural
potential not only in the
context of meeting domestic
staple food needs but in
unleashing its food export
potential.
This potential however,
cannot be achieved if
the primary bottleneck
of restricted access to
finance is not
addressed with urgency.

5. |
1
4
BANK CREDIT TO AGRIC SECTOR IN YEAR 2012
Even though the agricultural sector contributes significant proportion of
the GDP, bank credit to the sector was only 3.9 per cent at end-2012.
Less Preferred
Sectors; 38,2
Others; 22,3
Agriculture; 3,9
Solid Minerals; 21,7
Exports; 0,8
Manufacturing;
13,1
Priority Sectors,
39.5
BANK CREDIT TO AGRICULTURE IN NIGERIA

6. | 5
FINANCIAL RISK IN AGRICULTURAL LENDING
Financial risk is a broad term that refers to the types of risks associated with financing
and financial transactions e.g. loans have the risk of default. This is one of the major
reasons why banks do not lend to Agriculture in Nigeria.
Some Forms of Financial Risks
Credit risk (also called default risk), is the risk
associated with a borrower going into default
(not making payments as promised).
Asset-backed risk : Risk that the changes in one
or more assets that support an asset-backed
security will significantly impact the value of the
supported security.
Liquidity risk: This is the risk that a given security
or asset cannot be traded quickly enough in the
market to prevent a loss (or make the required
profit).
Market risk e.g Equity risk, Interest rate risk,
currency risk, commodity risk.
A survey by the World Bank
revealed that about 52
percent of firm managers in
Nigeria indicated that access
to finance was a serious
constraint and 46 percent of
the same group indicated
that cost of financing was the
next constraint.

7. |
RISK FACTORS AFFECTING BANKS’ FINANCING OF AGRICULTURE
• PERCEPTION
-High perceived risk
-Lack of understanding of the agric. sector
-High default rates from government-
driven lending programs.
-Do not perceive agriculture as a business
-Are unable to access and price the risk
elements and so want the sector de-risked
to make it more attractive for financing
• COVARIANT RISKS
-Incremental weather, pests and diseases,
price volatility, farming systems and the
differentiation of farmers
• OTHER CHALLENGES
-Agriculture suffers information
asymmetry;
-Lacks the required technology and
infrastructure.
6

8. | 7
CONSEQUENCES OF BANK’S PERCIEVED RISK IN AGRICULTURE
i. Missed opportunities – Many promising projects fail to see the
light of the day because of banks failure to lend.
i. Significant cost overruns – Excess cost above original estimates
as a result of expenses due to risk assessments.
ii. Scheduled delays – Risk assessment increases the cycle time for
processing agric. Loans.
iv. Cancellations/licence withdrawals – under regulated banking
regimes non- compliant banks may suffer indictments

9. | 8
CONSEQUENCES OF BANK’S PERCIEVED RISK IN AGRICULTURE CONT’D
v. Fines and penalties – As a result of sharp practices erring banks
face fines and penalties.
vi. Loss of credibility – As a result of iv. And v. credibility issues arise
for indicted lending institutions.
vii. Loss of output/market share – farmers produce below
optimum while banks suffer reduced market share that would have
accrued from agric. Financing.
viii. Reduction or total loss of income – When there is reduced
or no production there will be reduced or lost income from agriculture.

10. | 9
Credit guarantee is a form of insurance that helps to protect the interests of
a seller from the chance of non- payment by a buyer.
CGSs therefore provide guarantees to groups that do not have access to
credit by covering a share of the default risk of the loan. In case of default,
the lender recovers the value of the guarantee.
Credit guarantee schemes provide guarantees to individuals or groups that do
not have access to credit by covering a share of the default risk of the loan. In
case of default, the lender recovers the value of the guarantee.
CGSs are thus designed to diminish the risk associated with lending to SMEs
as they can reduce information asymmetry and alleviate high collateral
requirements.
WHAT ARE CREDIT GUARANTEE SCHEMES (CGSs)

11. | 10
BENEFITS OF CREDIT GUARANTEE SCHEMES
i. Reduction of the overall risk in an economy
ii. Mitigating against inefficient distribution of wealth
iii. The interest of banks to finance SMEs can be increased by the use
of guarantee mechanisms.
iv. Financial sustainability - It is possible for credit guarantee
schemes to stand on their own, without outside assistance.
v. Credit additionality i.e. the extra loans that would not have come
about without the credit guarantee scheme
vi. Economic additionality and spillover effects i.e. the opportunity to
contribute not only to credit additionality, but also to technology and
knowledge spillover and economic additionality, e.g. increases in
profit and/or employment.

12. | 11
CREDIT GUARANTEE SCHEMES IN OTHER CLIMES (STYLIZED FACTS)
a. Canadian Small Business Financing
Program (CSBF)
• Type of Guarantee – MSMEs (Private)
• Guarantee Coverage – 85%
• Maximum Limit - $500,000.00
• Guarantee fee – 2% of loan
b. The Small Business Development Fund
(SBDF) of Slovenia
• Type of Guarantee – MSMEs (Public)
• Guarantee Coverage – 60 to 80%
• Maximum Limit - $60,000.00
a. Portugal Mutual Counter-Guarantee
Fund
• Type of Guarantee – MSMEs (Private)
• Guarantee Coverage – 80%
• Guarantee fee – 2% of loan up to
€150,000 and 1.5% for larger
transactions.
a. Chilean Guarantee Fund for Small
Businesses
• Type of Guarantee – MSMEs (Public)
• Guarantee Coverage – 80% for loans
below $90,000.00 and 50% for loans
above $90,000.00
• Guarantee fee – 2% of loan
depending on borrowers default
history.

13. | 12
BASIS FOR CENTRAL BANK OF NIGERIA’S AGRICULTURE
FINANCING INTERVENTION PROGRAMMES AND SCHEMES
These endeavors are
expected to facilitate the
emergence of a strong and
self-sustaining agricultural
economy in which private
sector would ultimately be
the leading engine of
growth.
In view of the risks associated
with the agricultural sector
and banks reluctance to
finance the sector, the Central
Bank of Nigeria has been
involved in the design and
implementation of guarantee
schemes and programmes
aimed at addressing the
problem of limited access to
credit by large, medium and
small-scale producers..

14. |
CREDIT GUARANTEE SCHEMES OF THE CENTRAL
BANK OF NIGERIA (CBN)
13
1
Central Bank of
Nigeria
Credit Guarantee
Schemes
Nigerian Incentive Based
Risk Sharing System
for Agricultural Lending
NIRSAL (2010)
N200 billion Small and
Medium Enterprises
Credit Guarantee
Scheme (2010)
Interest
Drawback
Programme -
IDP
Agricultural Credit
Guarantee Scheme
Fund
ACGSF (1978)
Trust Fund
Model - TFM
SME
Finance
Agric.
Finance
The Central Bank of Nigeria operates a direct retail credit
guarantee scheme system geared towards agriculture and MSMEs
Self-Help
Groups Linkage
-
SHG

15. Agricultural Credit Guarantee Scheme (ACGS)
Objectives
 Provides guarantee of 75% for loans
granted for agricultural purposes
 Encourages commercial banks to
increase lending to the sector
 Stimulates increase in productivity
across the agriculture value chain
Funding StructureEstablishment
The Agricultural Credit Guarantee Scheme
Fund (ACGSF) was established by Decree
No. 20 of 1977, and became operational in
April 1978.
CBN 40%
FGN 60%
CBN – Central Bank of Nigeria
FGN – Federal Government of
Nigeria
Why the ACGSF ?
14

16. Agricultural Credit Guarantee Scheme (ACGS) Cont’d
Activities
 ACGS Fund provides credit guarantee
on facilities extended to famers by
banks up to 75 per cent of the amount
in default net of any security realized.
 Activities covered under the Scheme
are crop and livestock production,
processing and marketing.
 Others are establishment or
management of plantation for the
production of rubber, oil palm, cocoa,
coffee, tea and similar crops.
 N71.471billion disbursed to 859,541
farm enterprises
Modalities
Managing Agent
The Fund is managed by the Central
Bank of Nigeria which is responsible
for its day-to-day operations.
Max Loan Limit = N10m
adjusted in June 2014 to N50m
The ACGS Framework
15

17. Innovations under the ACGS
Self Help Linkage Banking Programme
The Self-Help Group Banking Linkage Programme (SHGBLP) was launched
in 1991 and became operational in 1992.
Establishment
Objectives
The aim of the Self-Help Group Linkage
Banking is to:
 Provide alternative form of guarantee to
commercial banks through use of
resources pooled together by farmer
groups
 Inculcate banking habits in farmers
 Mobilize farmers to build up resources
for financing their farm projects without
recourse to bank borrowing on the long
run.
16

18. Innovations under the ACGS Cont’d
Trust Fund Model (TFM) Cont’d
 The Trust Fund Model (TFM) was introduced in
2001
 Reduction of the risk exposure of banks in
agricultural lending to uncollateralized farmers
under the ACGS.
 Reinforce the confidence of banks in granting
credit facilities to farmers
 Under TFM, oil companies, State/Local
Governments and Non Governmental
Organizations (NGOs) place funds in trust with
lending banks to augment the small group-
savings of the farmers as security for
agricultural loans
 The Trust Fund secures 25% or more of the
intended loans of the prospective borrowers;
 The farmers’ savings secure another 25% of
the loan while;
 the ACGSF guarantees 75% of the remaining
50%, thereby leaving the lending bank with a
risk exposure of only 12.5%.
 51 MOUs signed valued N5.516 billion
25% Cash Deposit by
Farmers as Security
25% Cash Deposit
from Counter parties
as Security
75% Guarantee from
ACGS
Credit Risk is
reduced to 12.5%
for Lending banks
17

19. Innovations under the ACGS Cont’d
Interest Drawback Programme (IDP)
 Introduced in 2003 for loans under the and
has a capital base of N2.0 billion
subscribed to by the Federal Government
(60%) and Central Bank of Nigeria (40%).
 The IDP is managed by the CBN and under
the ACGS Board
Establishment
Objectives
 Provide interest rebate to farmers that
fully paid their loans on schedule.
 Reduce the cost of borrowing and burden
of high interest rates to farmers.
 To encourage timely repayment and
reduce the contingent liability on the
ACGS Fund
CBN 40%
FGN 60%
Funding Structure
CBN – Central Bank of Nigeria
FGN – Federal Government of
Nigeria
18

20. Innovations under the ACGS Cont’d
Interest Drawback Programme (IDP)
 Under the IDP, farmers borrow from lending banks at
market-determined rates
 Provide interest rebate of 40% to farmers that fully repaid
loans on schedule to reduce the cost of borrowing.
Modalities
19
Interest rebate of 40%, valued N2.05 billion
($13.163million) paid to 240,665 claims as at end-
April 2014.

21. Loans Guaranteed Under the ACGS
20
881,892
881,892
856,731
208,495
As at end-April 2014
Granted N74.93 billion ($481.153 million) to 881,892
beneficiaries since inception.

22. Repayments and Settled Claims
under the ACGSF
N74.93
Billion N51.45
Billion
0
10
20
30
40
50
60
70
Releases Repayments
Releases ,
881,892
Beneficiaries
Repayments,
664,559
Beneficiaries
Repayments and Claims
settlement
Cumulatively, repayment
under ACGS stood at 664,559
valued N51.45 billion
($330.37 million) from
inception to end April 2014.
The Scheme has recorded a
repayment rate of 68.66%*.
On the other hand, the
cumulative number of settled
claims from inception to date
is 14,682 claims valued
N546.94 million ($3.512
million).
Note:
$1 = N155.73
The ACGSF has
recorded a
repayment rate of
68.66%.
The rather low repayment rate (68.66%) is because
many loans are still ongoing and yet to be liquidated

23. ACGS SUSTAINABILITY FRAMEWORK
To ensure the sustainability of the ACGS Fund
and further strengthen its ability to meet its
contingent liability
 The ACGS Fund is invested in Nigerian
Treasury Bills
 The IDP also reduces the quantum of claims
payments by encouraging farmers to repay
on time through rebates.
N100.0m
1978
N6.167b
2014
N3.0b
2001
22

24. 23
ACGS Impact Scenarios

25. ACGS Impact Scenario, Cont’d
Loan Size & Limit
The demand for loan size of <N5,000 has continually decreased from 20,848 loans
in the year 1990 to only 27 loans in 2013 while the demand for loan size >N100,000
increased from just 15 loans in the year 1990 to 20,315 loans in the year 2013.
Loans below N100,000 make up 63.90% of the total guarantees demanded
24

26. | 25
SWOT ANALYSIS OF THE ACGSF
Strengths
• ACGSF has a good risk formula (75%/25%).
• The Fund has never refused to pay a claim.
• The DMBs have a representative on ACGSF’s
Board which deepens confidence.
• Initiatives such as the IDP have decreased
the rate of default by borrowers.
Weaknesses
• The delays in settling claims.
• Inadequate scrutiny of loan
applications by banks led to massive
default rates
• Lack of MIS given the large volumes
of loans.
Opportunities
• In Nigeria, there is a large
market for credit among small-
scale farmers.
• Favorable policies in place
towards financial inclusion and
real sector financing.
Threats
• The non-autonomous nature of the ACGSF
board, which is subject to the influence of the
national government.
• Two banks (Union Bank of Nigeria and First
Bank of Nigeria) are the major players in the
Scheme. If one of these banks opts out,
consequences would be dire for agricultural
productivity and food security.

27. |
NIGERIA INCENTIVE-BASED RISK SHARING SYSTEM FOR AGRICULTURAL LENDING
(NIRSAL): A VALUE CHAINS APPROACH TO CREDIT GUARANTEE UNDER THE
NIRSAL is an initiative aimed at;
•Providing farmers with affordable
financial products
•Reducing the risk to loans
The Central Bank of Nigeria (CBN)
on August 9, 2010 signed an
Agreement with the Alliance for a
Green Revolution in Africa (AGRA)
to develop this new mechanism for
unlocking the access of farmers,
agro-processors, agribusinesses
and input suppliers to financing in
the agricultural value chain.
OBJECTIVES OF NIRSAL
•Spark agricultural industrialization
process through increased
production and processing across
the value chain.
•Build capacities of Nigerian banks
to lend to agriculture,
•Deploy risk sharing instruments
that will lower the risks of lending,
•Provide technical assistance for
farmers and banks
•Develop a bank rating scheme that
will incentivize and
showcase/situate banks based on
their capacities to lend to the
agricultural sector.
26
1

28. |
NIRSAL is pivoted on five pillars to be addressed by an estimated USD 500
million of CBN money that will be invested to address the various aspects of
the pillar as follows:
•Risk-sharing Facility (USD 300 million).
•Insurance Facility (USD 30 million).
•Technical Assistance Facility (USD 60 million
•Holistic Bank Rating Mechanism (USD 10 million).
•Bank Incentives Mechanism (USD 100 million).
27
NIRSAL CONT’D

29. NIRSAL Mechanics
• A guarantee fee of 1% per annum on outstanding balance of amount
guaranteed.
• Loans benefiting from existing CBN schemes/interventions e. g.
ACGSF, ACSS AND CACS are not eligible for interest drawback.
• NIRSAL shares risk with Banks and other Counterparties on
predetermined rates of the face value on loans: primary production
& mechanization - 75%, large scale & processing – (50%), logistics
(20%).
• Each risk guaranteed loan is qualified in principle for consideration
for interest drawback paid on quarterly basis. Small holder farmers
and cooperatives (40%), Large scale farmers and Agro input dealers
(20%).

30. RiskSharingoccursintheformofsellingaCreditRiskGuarantee...
Potential lenders include
traditional banks,
microfinance institutions,
trade finance providers, asset
managers, and private equity
funds
Credit instrument could be a
loan portfolio, a loan, a bond
or in some cases, a specific
commitment letter
Identified Lender /
Issuer
/Counterparty
NIRSAL Credit Risk
Guarantee
Identified
Borrower
Potential borrowers include
farmer groups (cooperatives),
large corporate farmers,
processing companies, agric
service providers, logistics
companies, wholesale
distributors etc
Whole agribusiness value chain
covered across all crops and
livestock activities
Loan principal
Loan principal and
Interest payments
Interest Rebates
Small scale - 40%
Large Scale - 20%
Agro dealer - 20%
Guarantee
Fee (1%)
Credit Risk
Guarantee
(Face Value)
Production - 75%
Processing - 50%
Logistics - 20%
NIRSAL Mechanics, Cont’d

31. |
NIRSAL AS AN AUTONOMOUS ENTITY
• Approval has been granted for NIRSAL to operate as an
independent entity. 30
Achievements of NIRSAL
From Inception to April 2014
• Forty (45) CRGs Covers valued N16.272 billion ($104.48 million) were issued to
beneficiaries.
• Seventy three (73) IDPs valued N139.990 million ($898,927.63), as at April 2014.
Note:
$1 = N155.73

32. The Small and Medium Enterprises Credit Guarantee
Scheme (SMECGS)
Stimulate and sustain private sector investment in
the power and airline sectors as well as fast track
the development of both sectors of the economy
To fast-track the development of the manufacturing SME
sector of the Nigerian economy by providing guarantee for
credit from banks to SMEs and manufacturers
Purpose
Provide guarantee cover of 80% of principal and interest
on term Loans to SMEs for
refurbishment/equipment/upgrade/expansion,
overdrafts, etc.
Modality
The raised N200 billion ($1,284 billion) as contingent
liability to provide 80% guarantee cover to banks for SME
loans
Funding
Note:
$1 = N155.73

33. The Small and Medium Enterprises Credit
Guarantee Scheme (SMECGS), Cont’d
20%
72 SME Projects
CBN Assumes 80%
risk on SME loans by
providing Guarantees
to Banks
Via a contingent
liability fund of N200
billion80%
BankLoansto
SME
Banks take only 20%
risk on SME loans
N3.216 billion
($20.65 million)
Performance
As of April 2014
REPAYMENT
The sum of N1.558 billion ($10.004 million) has been
repaid by 23 SME projects.
Note:
$1 = N155.73

34. The Nigerian Export-Import Bank (NEXIM)
33
OTHER INSTITUTIONS INVLOVED IN CREDIT GUARANTEE
IN NIGERIA
Note:
$1 = N155.73
Types of Guarantees Issued by NEXIM
PRE-SHIPMENT GUARANTEE: This is a guarantee of credits/advances granted by
NEXIM for the purpose of manufacturing, purchasing, processing and/or packaging of
goods to be exported under a confirmed export order. It covers 75% of loans and
advances.
POST-SHIPMENT GUARANTEE: This is a guarantee of credits/advances granted by a
bank in Nigeria against an export bill or any other receivables. It covers 85% of loans
and advances.
ADVANCE PAYMENT GUARANTEE: This is designed to protect foreign buyers against
payment risks in respect of money advanced to exporters in Nigeria to finance an
export order. It covers 100% of loans and advances.
This is an independent DFI Established in 1991 as an Export Credit Agency (ECA).
NEXIM has since its inception disbursed over N13.651
billion ($87.65 million) as loans and advances.

35. |
1
34
BANK CREDIT TO AGRIC SECTOR 2009 - 2012
1,4 1,4
1,7
3,5
3,9
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
2008 2009 2010 2011 2012
Following CBNs interventions in recent years, commercial
bank’s credit to agriculture has increased from 1.4% in 2008
to 3.9% in 2012

36. | 35
CHALLENGES OF CREDIT GUARANTEE SCHEMES, CONT’D
Demand Side Challenges
• Limited managerial capability
due to inexperience, illiteracy
and absence of mentoring and
entrepreneurial network.
• Lack of collateral for small rural
borrowers
• Lack of good business plan to
convince banks to lend.
• Inability to afford insurance
coverage by poor rural people.
• Repayment problems due to
erroneous belief that CGS is a
national cake.
Supply Side/ Instituional
Challenges
• High collateral requirement,
interest rate and stringent
eligibility criteria for benefiting
under CGS at bank level.
• Banks’ risk averse behavior
• High interest rate charged by
financial institutions.
• Financial institutions’ lack of
capacity to develop suitable CGS
products to meet the needs of
clients.

37. | 36
CHALLENGES OF CREDIT GUARANTEE SCHEMES, CONT’D
Policy/Institutional Challenges
• Paucity of rigorous data on the
demand for financial services
especially in rural areas due to
information asymmetry.
• Political instability and social
insecurity have hindered
penetration of CGS particularly
agriculture.
• Agricultural Finance not
viewed as a strategic business
but development programme
by policy makers.
GOVERNMENTPOLICIES

38. | 37
WAY FORWARD FOR CREDIT GUARANTEE SCHEMES IN NIGERIA
• The micro finance sector should be a priority sector for deepening
guarantee schemes especially in rural areas.
• Government should inject more money to beef up the ACGSF capital base
and also utilize specialized banks in credit guarantee purveyance.
• Deployment of a fixed/movable collateral for beneficiaries who have
access to the formal lending institutions (CBN in collaboration with African
Finance Corporation has commenced efforts towards establishment of a
movable collaretary registry in Nigeria..
• Agriculture must be viewed as a strategic business by policy makers,
financial Institutions and practitioners.
• Central banks should ensure consistency, transparency and clarity of
respective legal and regulatory framework over all guarantee schemes.
• Provision of technical assistance to banks and entrepreneurs.

39. | 38
• Involving donors, the public sector and the private sector to serve as
sponsors under Trust Fund Models of guarantee schemes.
• There is need for appropriate designs of CGS in order to ensure
financial sustainability, taking into account on the one hand the
need to limit default rates and cover the operating costs.
• CGSs to be used as effective instruments to reduce the information
gap that exists between lenders and borrowers, especially in the
case of agriculture.
• There is need for more in-depth evaluation, particularly on CGSs
financial sustainability and on their financial and economic
additionality.
• Deployment of a rating system for financial institutions participating
in CGS with the objective of rewarding and motivating them
appropriately.
WAY FORWARD FOR CREDIT GUARANTEE SCHEMES IN NIGERIA, CONT’D

40. |
The CBN has been involved in the design and implementation of various Credit
Guarantee schemes and programmes with the aim of addressing the challenge of low
access to credit by large, medium and small-scale producers. This is due to the risks
associated with the agricultural sector and banks reluctance to the sector. These
initiatives include ACGSF, SMECGS and NIRSAL. They are endeavors geared towards
enabling the emergence of a strong and self-sustaining agricultural economy in which
private sector would power the engine of growth. It is evident that a lot has been
achieved, but more can still be done and CBN is poised towards that. The launching of
the Financial Inclusion Strategy in 2012 and the MSMEDF in 2013 are additional efforts
towards facilitating credit flow to agriculture and the real sector in general.
In the coming years, the Bank will continue to maintain its poise low/affordable
interest rates for agricultural loans as well as pursuing effective functioning of various
other initiatives to ensure effectiveness, efficiency, synergy and complementarities in
areas that are within its mandate.
CONCLUSION
39

41. | 40