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Agricultural Credit

Agric. Credit Guarantee Scheme Fund | Agric. Credit Support Scheme
Claims Settlement Activities

Claims Settlement Activities

Default Claims | Interest Draw Back Claims

Default Claims
The Managing Agent of the Agricultural Credit Guarantee Scheme Fund (ACGSF), the CBN undertakes investigation with a view to determining the status of the default claims submitted by lending banks, and making appropriate recommendations to the Board of Agricultural Credit Guarantee Scheme Fund (ACGSF) for settlement.

Claims settlement is central to the sustenance of the Agricultural Credit Guarantee Scheme, in that banks look forward to the payment of the 75% of the amount in default net of the amount realized from the security pledged as enshrined in the Guidelines.

From inception to September 2006, a total of 17,693 claims valued N461.0 million were filed on the Fund. Out of these, 8,680 claims with a value of N174.12 million which represents 49.06% of the number and 37.78% of the value of the claims filed have been settled. Out of 9,013 outstanding claims valued ^286.88 million, 8, 112 or 90% valued ^136.70 or 47% were found to be later fully repaid by the borrowers before the could be processed for settlement by the Fund. The reasons for non settlement of the outstanding 901 claims rage from improper documentation to litigation and duplication of applications.

Nevertheless a claims settlement rate of 49.06% and 37.78% in number and value respectively, indicates that the Scheme is responsive to the demands of lending banks. However, it also indicates that the factors militating against prompt and full settlement of claims are enormous and need to be tackled forthrightly.

A cursory look at the consolidated statistics in table 1 below reveals the trend of activities from inception of the Scheme in 1978.

From inception of the scheme to the 1990’s, there was a high incidence of request for claims settlement following high default rate, and indicating that this period was a learning period for bank lending to the agricultural sector.

In the last two years, claims filed on the Fund have reduced remarkably. This can be traced to the introduction of the Interest Drawback Programme (IDP) which has made customers repay their loans on a timely basis. 

Cumulative Statistics On ACGSF Claims Settled

Year Claims Filed Claims Settled
No. Amount ('000 Naira) No. Amount ('000 Naira)
1978 0 0 0 0
1979 0 0 0 0
1980 18 90 0 0
1981 38 613 0 0
1982 53 3,427.60 36 241.3
1983 52 3,680.00 24 147.9
1984 121 3,880.00 0 0
1985 94 6,636.50 93 431
1986 125 6,385.40 0 0
1987 85 2,155.60 68 534.1
1988 150 7,933.10 52 380.2
1989 160 8,526.60 48 191.2
1990 236 21,756.80 51 770.1
1991 810 27,972.50 67 253.7
1992 1,362 31,509.50 65 363.3
1993 998 28,659.10 91 455.9
1994 1,263 60,525.90 56 222.6
1995 598 60,149.90 130 2,817.60
1996 442 5,402.90 166 1,090.40
1997 232 5,181.60 690 6,134.20
1998 78 2,746.70 826 6,906.20
1999 79 2,488.80 498 5,471.30
2000 173 8,044.30 288 1,691.20
2001 312 7,216.40 436 6,405.00
2002 206 6,078.30 124 3,210.20
2003 506 9,236.30 168 3,440.30
2004 213 11,575.10 2,065 97,901.90
2005 8,074 731,845.87 2,382 18,782.06
2006 1,215 129,986.41 256 16,344.49
2007 517 31,791.87 165 23,324.40
2008 529 46,623.97 44 2,033.79
2009 54 31,375.08 38 14,231.70
2010 410 74,482.30 285 19,103.60
2011 (April) 890 150,345.21 24 9,706.35
TOTAL 20,093 1,528,322.61 9,236 242,585.99

 

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Facts : 1/1/1900
Structural Adjustment Programme (S.A.P.):Introduced in June 1986, the Structural Adjustment Programme was introduced after a public debate on IMF loan conditionalities. It was aimed at re-structuring the productive base of the ecnonomy and promoting non-inflationary economic growth.
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