The Central Bank of Nigeria said that it would publish names of loan defaulters under its Agricultural Credit Guarantee Scheme.
The apex bank warned that borrowers who divert the funds provided under the Agricultural Credit Guarantee Scheme Fund, ACGSF, may earn a five-year jail term.
According to a document titled “Guidelines for the Agricultural Credit Guarantee Scheme” recently released by the CBN, the aim of the fund is to provide a guarantee in respect of loans granted by lending banks for agricultural purposes under the scheme”
In furtherance of the scheme, the bank will do what it could to recover loans from defaulters. “The Fund if considered necessary will publish names of defaulters in the newspapers and report same to the Credit Information Bureau of Nigeria,” the Apex Bank stated.
The bank however, cautioned that the agriculture loans must be used for purposes for which they are obtained, as a diversion would attract a five-year jail term.
“Banks should remind prospective borrowers under the Scheme that it is an offence for which one may be imprisoned for five years to apply the loan for purposes other than those for which they are given,” the new guidelines instruct.
The program intends to boost the level of bank credit to the agricultural sector. Loans under the amended act include advances, overdrafts and any credit facility.
The purpose of the Fund is to provide guarantee in respect of loans granted by lending banks for agricultural purposes under the scheme with the aim of increasing the level of bank credit to the agricultural sector.
“Loan” under the amended act includes advances, overdrafts and any credit facility and should be taken as such wherever it is used in these guidelines and other circulars.