The Central Bank of Nigeria has said that borrowers who embezzle funds provided under the agricultural credit guarantee program can be sentenced to up to five years in prison.
The CBN said this in a report titled “Guidelines for the Agricultural Credit Guarantee Scheme” released on Thursday.
“Banks should remind potential borrowers under the program that it is an offense for which one can be jailed for five years for using the loan for purposes other than those for which it is granted,” he said. declared.
He stated that the fund’s maximum liability for any guarantees given under the program would be set from time to time by the ACGSF Board of Directors.
According to the CBN, the single debtor limit for non-tangible collateral is N 100,000 while the obligor limit for an individual, group / cooperative or company is N 50 million for secured loans.
He said the fund’s liability would be 75 percent of the amount in default, net of any amount realized by the bank from the collateral it obtained from the borrower, subject, in the event of a loan to an individual, an operating joint venture or a legal person, up to a maximum of N50 million.
The central bank said revised guidelines for regulating and supervising microfinance banks should be strictly adhered to because “they state that the maximum principal amount of a microcredit should not exceed N 500,000 or one percent of shareholders’ funds. unaffected by losses and / or as may be reviewed from time to time by the CBN ”.
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