Banks lending to agric sector decline by 22.7% in July -CBN

The Central Bank of Nigeria, CBN, has said that banks lending to agric sector declined in July indicating unwillingness of financial institutions operating in the country to lend to this all important sector of the economy. This revelation was made by the CBN July 2013 economic report posted on the apex bank’s website, yesterday.

According to the report, a total of N590.25 million was guaranteed to 5,407 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in the month of July 2013. This amount the bank said, represented a decline of 22.7 per cent and 15.2 per cent below the levels in the preceding month and the corresponding period of 2012 respectively.

Sub sectoral analysis according to the report showed that food crops obtained the largest share of N387.7 million, 61.7 per cent, guaranteed to 4,004 beneficiaries, while livestock got N133.1 million, 20.9 per cent guaranteed to 1,100 beneficiaries.

“Others’ received N17 million, 7.1 per cent, guaranteed to 48 beneficiaries, while N23.3 million, 4.9 per cent, was guaranteed to 44 beneficiaries in the fisheries sub-sector. Mixed crops had N24.8m, 3.9 per cent) guaranteed to 166 beneficiaries, while Cash crops received N4.4 million,1.5 per cent guaranteed to nine beneficiaries.”

Analysis by state showed that 32 states benefited from the scheme in the month of July 2013, with the highest and lowest sums of N117.6 million, 19.9 per cent and N0.4 million, 0.1 per cent, guaranteed to Edo and Delta states, respectively. The CBN also said at end- July 2013, the total amount released it under the Commercial Agriculture Credit Scheme, CACS, to the participating banks for disbursement stood at N219.2 billion for 292 projects.

The CBN also reported that estimated aggregate demand for foreign exchange by authorised dealers under the Wholesale Dutch Auction System (wDAS), Bureaude- change (BDC) was US$4.20 billion in July 2013, showing an increase of 36.1 and 62.6 per cent above the levels in the preceding month and corresponding month of 2012. The development relative to the preceding month’s level was attributed to increased demand at WDAS and BDC segments by 25.0 and 34.7 per cent, respectively, arising from liquidity surfeit in the banking sector.

“A total of $3.99 billion was sold by the CBN to authorised dealers during the period, reflecting a decrease of 22.1 per cent below the level in the preceding month, but an increase of 61.3 per cent above the level at the end of the corresponding period of 2012. “Under the WDAS segment, the average exchange rate of the naira vis-à-vis the US dollar, at N157.32, depreciated marginally by 0.1 per cent below the level in the preceding month.

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Banks lending to agric sector decline by 22.7% in July -CBN by

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