Loans made under this scheme are at single digit interest rate subject to a maximum of 9.0 per cent while the CBN bears the interest subsidy at maturity. The scheme was initially to promote commercial agricultural enterprises but was later amended to accommodate small-scale farmers through the on-lending scheme of the state governments.
All the 24 banks in the country would participate in the administration of the scheme, but only 7 banks are involved, thus far. As at end-October 2010 a total of about N90.36 billion has been disbursed to eleven banks including 15 state governments for financing 94 projects. Other developmental functions of the CBN that have impacted on the agricultural sector are the Agricultural Credit Guarantee Scheme and its Trust Fund Model, Interest Drawback Programme and the establishment of the Microfinance Banks.
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