By Jimoh Babatunde
The Central Bank of Nigeria, CBN, has so far released the sum of N88.533 billion to eleven banks in the country for disbursement for seventy-nine projects and promoters under the Commercial Agriculture Credit Scheme (CACS) as at the end of September 2010.
The Central Bank disbursed N1 billion each to twelve states that agreed to issue Irrevocable Standing Payment Orders (ISPOs) to the financing banks, just as Union Bank’s application for release of N0.50 billion in favor of the Federal Capital Territory (FCT) and Fidelity Bank’s application in favor of Sokoto State Government for the release of N1.0 is being considered.
A document from the Development Finance Department of the apex bank shows that under the second tranche, twelve State Governments namely; Adamawa, Bauchi, Enugu, Gombe, Kebbi, Kogi, Kwara, Nassarawa, Niger, Ondo, Taraba and Zamfara accessed N1.00 billion each for on-lending to farmers’ co-operatives and other areas of agricultural interventions in their various States.
It was revealed that Adamawa, Kebbi and Taraba states accessed the funds through Zenith Bank; Enugu did through Fidelity Bank; Gombe, Kwara and Niger States accessed their loan through Union Bank of Nigeria while the remaining states were funded through United Bank for Africa.
From the eleven banks participating in the scheme, these four banks have released N12 billion all together while UBA has got about N38 billion from the Central bank under the scheme for disbursement for various projects.
Fidelity Bank has the least money from the Central Bank with just N1.5 billion for two projects.
The Central Bank had also withdrawn a total sum of N9.184 billion (N7.003 billion from UBA,N0.581 billion from GTB and N1.60 billion from First Bank of Nigeria) as un disbursed funds to 11 projects from UBA and one project each from GTB and FBN during the Tranche.
The document revealed that the Central Bank withdrew the funds from the banks include inability of projects’ promoters to meet the condition precedent for the disbursement of the CACS funds to them; collateral related issues; negative credit risk management system report and initial unwillingness of State governments to provide Irrevocable Standing Payment Orders to banks.
Other reasons for the fund withdrawal by the Central Bank include inability to provide other support documents demanded by banks and technology choice challenges as a result of poor power supply to project sites.