Under the reviewed guidelines which affect sections 16 and 17 of the document, the Nigerian Agricultural Insurance Corporation (NAIC) shall henceforth provide insurance cover for all the Agricultural projects in the event of losses arising from the various hazards insured in the value chain.
The NAIC according to CBN, shall also ensure that the subsidized portion of the premium in the production policies is collected from both the Federal and State Governments.
Available in the bank’s website, the guideline defines a commercial enterprise as “any farm or agro-based enterprise with agricultural asset (excluding land) of not less than N100 million for an integrated farm with prospects of growing the assets to N250 million within the next three years and N50 million for non-integrated farms/agro-enterprise with prospects of growing the assets to N150 million, except in the case of on-lending to farmers’ cooperative societies.”
According to CBN, all participating banks are required to sponsor projects from any of the target areas indicated in the Guidelines and bear all the credit risk of the loans they will be granting.
The single obligor for any project from a participating bank under the Scheme shall be N2.0 billion while for State Governments, it shall be N1.0 billion. However, for special schemes and programmes for agricultural development, State Governments may be granted concessionary approval for more than N1.0 billion.
“The borrower shall: Be a limited liability company with asset base of not less than N100 million and having the prospect to grow the net asset to N250 million in the next three years and complies with the provision of the Company and Allied Matters Act (1990; Have a clear business plan; Provide up-to-date record on the business operation if any; Have out growers programme, where appropriate; Satisfy all the requirements specified by its lending bank,” the document read in part.
Meanwhile, participating Banks under the NAIC insurance cover Guidelines shall: Educate and enlighten the borrower to take NAIC insurance policies for the various items across the agricultural value chain; Obtain NAIC insurance covers as condition precedent to the draw down/disbursement of the loan; Calculate the premium due, in consultation with NAIC, in respect of the various insurances that would be effected on the projects of the borrower and deduct the premium from the approved loan on behalf of NAIC among others.
and then