The Central Bank of Nigeria (CBN) has threatened to publish in newspapers the 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 published by the CBN.
The CBN also warned that borrowers who divert funds provided under the Agricultural Credit Guarantee Scheme Fund, ACGSF, can win 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. To promote the scheme, the bank will do whatever it takes to recoup loans from defaulters.
“The Fund, if deemed necessary, will publish the names of defaulters in the newspapers and report it to the Nigerian Credit Information Office,” the bank stated.
However, the main bank cautioned that agricultural loans should be used for the purposes for which they are obtained, as a deviation would carry a five-year prison sentence.
“Banks must remind potential borrowers under the Scheme that it is a crime for which one can be imprisoned for five years for requesting the loan for purposes other than those for which it was granted,” the new guidelines instruct.
The program aims to boost the level of bank credit to the agricultural sector. Loans under the amended law include advances, overdrafts, and any lines of credit.
The objective of the Fund is to provide collateral in respect of loans granted by agricultural lending banks under the scheme with the objective of increasing the level of bank credit to the agricultural sector.
“Loan” under the amended law includes advances, overdrafts and any lines of credit and should be taken as such whenever it is used in these guidelines and other circulars.