|AGRICULTURAL CREDIT GUARANTEE SCHEME FUND ACT|
COMMENCEMENT: 8th March, 1977
1. (1) There shall be established a fund to be known as the Agricultural Credit Guarantee Scheme Fund (in this Act referred to as "the Fund") for the purpose of providing guarantees in respect of loans granted for agricultural purposes by any bank in accordance with the provisions of this Act.
(2) The guarantees to which subsection (1) of this section relates are guarantees in relation to the payment of the interest and principal of the loan.
(3) The reference in this section to agricultural purposes is a reference to any of the purposes set out in the Schedule to this Act.
(4) The Minister may by order published in the Federal Gazette add to, delete from, or otherwise vary the provisions of the Schedule to this Act.
Establishment of the Board
2. (1) The Fund shall, subject to section 4 or this Act, be managed by a body to be known as the Agricultural Credit Guarantee Scheme Fund Board (in this Act referred to as "the Board") which shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its corporate name.
(2) The Board shall comprise-
(a) four persons appointed by the Minister, one or whom shall be designated chairman;
(b) two representatives of the Central Bank; and
(c) one representative of the Bankers Committee.
(3) The quorum for meetings of the Board shall be four of whom at least one shall be a representative of the Central Bank.
(4) The Board shall meet not less than four times in each year and on such other occasions as the Board may consider necessary.
(5) At any meeting of the Board the Chairman shall preside; but if he is absent, the members present at the meeting shall appoint one of their numbers to preside at that meeting.
(6) Subject to section 27 of the Interpretation Act (which provides for decisions of a statutory body to be taken by a majority of its members and for the person presiding to have a casting vote), the Board may make standing orders regulating its proceedings or any sub-committee thereof.
(7) Where the Board desires to obtain the advice of any person on a particular matter, the Board may co-opt him as a member for such period as it thinks fit; but a person who is a member by virtue of this subsection shall not be entitled to vote at any meeting of the Board and shall not count towards a quorum.
(8) There shall be a secretary to the Board who shall be an official of the Central Bank designated as such and the secretariat of the Board shall be located in the Central Bank.
administrative expenses of the Board shall be borne by
the Federal Government.
Functions of the Board, etc.
(1) Notwithstanding any other provisions of this Act, the functions of the Board shall include the general power of-
(a) monitor the operation and evaluate the progress of the Scheme;
(b) advise the Minister as to changes required to improve the operation of the Fund;
(c) receive and consider the report of the management agent of the Fund and advise the Minister thereon;
(d) determine the remuneration of external auditors and solicitors;
(e) perform such other duties relating to the Fund as may be referred to it by the Minister;
(f) publish names of defaulters of loans granted under this Act in the national newspapers;
(g) approve the operational budget of the Fund; and
(h) solicit the assistance of government loan machineries in the recovery of loans granted under this Act.
Minister may give the Board directions of a general
character or relating generally to particular matters
with regard to the exercise by the Board of its
functions under this Act and it shall be the duty of
the Board to comply with such directions.
Appointment of managing agent
4. (1) The Minister may appoint for such period as he may deem fit any person (whether corporate or unincorporate) as the managing agent for the administration of the Fund and any person so appointed shall act in accordance with any general or special directions as may, from time to time, be given by the Board.
(2) The Central Bank shall he deemed to have been appointed as the managing agent for the purposes of subsection (1) of this section and the appointment shall have effect for such period as the Minister may direct.
(3) Any person appointed as the managing agent pursuant to this section shall be remunerated from moneys provided for that purpose by the Federal Government upon such terms as the Board may, with the approval of the Minister, determine.
Amount to be paid into the Fund
5. The Fund shall consist of the sum of one hundred million naira which shall be paid as soon as may be after the establishment of the Fund and shall be contributed-
(a) as to sixty per cent, by the Federal Government; and
as to forty per cent, by the
Limits of liability of
the Fund in respect of guarantees
6. (1) The maximum liability of the Fund in respect of any guarantee given pursuant to this Act shall not exceed seventy-five per cent of the specified loan, being-
(a) in the case of a loan granted to any individual, any sum up to but not exceeding N100,000.00; and
(b) in the case of a loan granted to a co-operative society or a corporate body, any sum up to but not exceeding N1,000,000.00.
the purposes of this section, loan means the principal
loan and the interest thereon.
Applications for loans and for guarantees, etc.
(1) Applications for guarantees under this Act shall be made to the Board by the hank concerned following a request for a loan made to that bank and such applications shall be in such form as the Minister may prescribe.
for any reason any request for a loan for the purposes
of this Act is rejected by any bank, the bank shall
give reasons therefore to the person making the
request and shall specify what steps should be taken
by the person to enable him to comply with the bank's
Form and terms of loan agreement
agreement for a loan in respect of which a guarantee
is to be given under this Act shall be in such form
and upon such terms and conditions as the Minister may
Rate of interest
rate of interest payable on a loan granted pursuant to
this Act shall be as may be directed by the Minister.
Forms of security
10. (1) Security required by a bank for the purpose of any loan under this Act may be one or more of the following that is to say-
(a) a charge on land in which the borrower holds a legal interest or a right to farm, or a charge on the crops on such land;
(b) a charge on the movable property of the borrower;
(c) a life assurance policy, a promissory note or other negotiable security;
(d) stocks and shares;
(e) a personal guarantee;
(f) any other security acceptable to the bank;
requirement of security for a loan specified under the
provisions of subsection (1) of this section may be
waived in the case of a loan of the sum of N5,000.00
or below granted to a small scale farmer.
Safeguard in respect of certain loans
a loan or any portion thereof, in respect or which a
guarantee is to be given under this Act, is to be
applied to the purchase of livestock, machinery or
farming equipment, the loan or portion thereof, as the
case may be, shall not be paid to the borrower but
shall instead be paid by the bank directly to the
supplier who shall furnish the bank with a copy of the
delivery note or other document in evidence of the
delivery of the livestock,
Recovery of outstanding loan, etc.
12. (1) Where there has been a default in the repayment of the interest or principal of any loan guaranteed under this Act, the bank concerned shall in the first instance endeavour to recover the amount outstanding from the borrower or his sureties, if any, and may for that purpose dispose of any security obtained in respect of the loan.
any part of the interest or principal remains
outstanding after the steps specified in subsection
(1) of this section have been taken, or where the
recovery of any amount outstanding is impracticable,
the bank may apply, in the prescribed form, to the
Board for payment and the Board shall, in accordance
with the terms of the guarantee,
Loans to be applied for purposes for which made, and offences
(1) No loan granted pursuant to this Act shall be applied to any purpose other than that for which the loan was granted.
(2) Any person who applies any loan granted pursuant to this Act in contravention of subsection (1) of this section shall be guilty of an offence and shall be liable on conviction to a fine of an amount not less than the amount of the loan in respect of which the offence was committed or to imprisonment for not less than five years.
an offence under this section committed by a body
corporate is proved to have been committed with the
consent or connivance of, or to be attributable to any
neglect on the part of any director, manager,
secretary or other similar officer of the body
corporate (or any person purporting to act in any such
capacity) he as well as the body corporate shall be
deemed to be guilty of the offence and may be
proceeded against and punished accordingly.
Miscellaneous and Supplementary
Rules and publication
(a) form of application for loans and for guarantee of loans under this Act;
(b) terms, conditions, rates of interest, fees or administrative charges in respect of loans;
(c) form of application for repayment of outstanding loans under any guarantee and other matters connected therewith;
(d) any other matter that may be incidental or supplemental to any of the above matters.
shall not be necessary for any rules made by the
Minister under this section to be published in the
but where the provisions of any rules may
affect the interest of any person the Board shall
bring any information contained thereunder to the
notice of the person affected in such manner
(including publication thereof in the Federal Gazette) as
the Board may deem necessary.
Banks to establish Agricultural Finance Departments
15. A lending bank shall establish at its head office, a department to be known as the Agricultural Finance Department which shall be responsible for-
(a) the agricultural credit administration in the bank;
(b) the formulation and implementation of agricultural credit policies of the bank;
(c) the co-ordination of the activities of the Agricultural Credit Units in its zonal or area offices and branches.
Return by banks
16. (1) A lending bank shall prepare and submit to the Fund, in such form and within such period as the Minister may determine a return on its activities with regard to loans granted by the bank for the purposes of this Act.
(2) The Board may impose on any bank that fails to submit a return under subsection (l) of this section the following penalties, that is-
(a) N500 for each day on which the bank fails to submit the return, for a maximum of 30 days; and
(b) thereafter N1,000 for each day the failure persists.
17. All legal proceedings of a civil nature arising-
(a) from the failure of any borrower to repay a loan granted by a bank and guaranteed under this Act, shall be instituted and conducted by or against the bank;
(b) from any matter pertaining to any guarantee given pursuant to this Act,
shall be instituted and conducted by or against the Board.
Investment of surplus moneys in the Fund
in the Fund which may at any time be surplus to the
current needs of the Fund may be invested in such
securities as may, from time to time, be approved by
19. Accounts and audit
(1) The managing agent shall keep separate accounts in respect of monies forming part of the Fund and proper records in relation thereto and shall prepare annually a statement of account in such form as the Minister may direct.
(2) For the purposes of subsection (1) of this section, the financial year of the Fund shall be from 1 January to 31 December of every year or such other period as may be determined by the Board with the approval of the Minister.
accounts of the Fund shall be audited annually by
external auditors appointed by the Board from the list
and in accordance with guidelines supplied by the
Auditor-General for the Federation.
20. (1) It shall be the duty of the managing agent to prepare and submit through the Board to the Minister, not later than three months after the end of each financial year, a report which shall be in such form as the Minister may direct.
report shall include the audited accounts of the Fund
in respect of the period in question together with the
auditor's report on the accounts and shall be
presented by the Minister to the President so soon
after receipt thereof as may be convenient.
21. The Board may, with the approval of the Minister, make regulations generally for carrying into effect the provisions of this Act and, in particular-
(a) to vary-
(i) the penalties which the Board may impose for failure to submit a return under section 16 of this Act;
(ii) the agricultural purposes set out in the Schedule to this Act;
(iii) the maximum liability of the Fund in respect of guarantees;
(iv) the amount of unsecured loans that may be granted to a small scale farmer;
(v) the amount of loans guaranteed to individuals and corporate bodies; and
(b) to require a farmer, who
receives a loan under this Act for insurable crops, to
take an agricultural insurance.
22. In this Act, unless the context otherwise requires-
"Bank" has the same meaning as in
the Bank and Other Financial Institutions Act;
"Central Bank" means the Central Bank of Nigeria established by the Central Bank of Nigeria Act;
"Fund" means the Agricultural Credit Guarantee Scheme Fund established by section 1 of this Act;
"Lending bank" means a bank concerned with
the granting of loans under this Act;
"Loan" includes advances, overdrafts and any credit facility;
"Minister" means the Minister charged
with responsibility for Finance.
Act may be cited as the Agricultural Credit Guarantee
Scheme Fund Act.
1. Any purpose connected with-
(a) the establishment or management of plantations for the production of rubber, oil palm, cocoa, coffee and similar crops;
(b) the cultivation or production of cereal crops, tubers, fruits of all kinds, cotton, beans, groundnuts, she nuts, beni-seed, vegetables, pineapples, bananas and plantains;
(c) livestock production including cattle ranching, piggery, poultry, and fish culture, fish captures and storage;
(d) farm machinery and hire
the provisions of sub-paragraphs (a), (b) and
paragraph 1 of this Schedule, agricultural purposes
shall include integrated agricultural projects,
incorporating production and processing, provided that
the primary production element accounts for not less
than forty per cent of the raw material required by
|Served by TREE&Trees
JusticeMedia (Nigeria's justice sector social