Patterns in Agricultural Loans under the Agricultural Credit Guarantee Scheme in Nigeria

Abstract

This paper assessed the performance of the Agricultural Credit Guarantee Scheme (ACGS) with the objectives of: (i)
determining the trend in the annual total number and value of loans guaranteed, (ii) ascertaining the direction of loans
guaranteed, and (iii) determining the risk of non-repayment level associated with loans guaranteed to farmers. Data were
obtained from the Central Bank of Nigeria (CBN, 2010a) for the 20 year period of 1991 to 2010 and were analyzed by the use
of tables, graphs and descriptive statistics of minimum, maximum and mean and risk measurement. Parts of the findings were
that the yearly total number and value of loans guaranteed by the Scheme and the number and value fully repaid were on the
increase; the risk of non-repayment was also on the increase though it nosedived in 2010. Further, that about 0.2% of the
estimated households population in Nigeria was reached in terms of loans and that the average unit loan value guaranteed
ranged from N3,729.78 to N155,661.17. Individual farmers received upward of 92% and 76%, respectively, of annual number
and value of loans guaranteed. It was recommended that the Scheme should review and incorporation the lessons learned
from 1991 to 1999 into a new policy and strategy formulation and operation that would engender another era of low risk of nonrepayment
of loans with increases in loan expansion.