The Central Bank of Nigeria (CBN) has said it would soon publish in the newspapers names of loan defaulters under its Agricultural Credit Guarantee Scheme.
This is according to a document titled: “Guidelines for the Agricultural Credit Guarantee Scheme” recently released by the CBN.
The CBN also warned that borrowers who divert the funds provided under the Agricultural Credit Guarantee Scheme Fund (ACGSF) might earn a five-year jail term.
According to the CBN, the Fund aims to provide a guarantee in respect of loans granted by lending banks for agricultural purposes under the scheme, adding that in furtherance of the scheme, the bank will do what it must to recover loans from defaulters.
“The Fund, if considered necessary, will publish names of defaulters in the newspapers and report the same to the Credit Information Bureau of Nigeria,” the bank stated.
The apex bank, however, cautioned that the agriculture loans must be used for purposes for which they were 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 instructed.
The programme 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, according to the apex bank, includes advances, overdrafts and any credit facility and should be taken as such wherever it is used in these guidelines and other circulars.