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Diversion of agric loans could attract 5-year prison term – CBN

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THE Central Bank of Nigeria (CBN) has warned that borrowers who diverted funds provided under the Agricultural Credit Guarantee Scheme Fund (ACGSF) could spend five years in prison.

CBN gave the warning in a document that spelt out the guidelines for the agricultural credit guarantee scheme.

“Banks should remind prospective borrowers under the Scheme that it is an offence for which one may be imprisoned for five years, to apply the loan for purposes other than those for which they are given,” the CBN warned in the document.

The apex bank stressed that the loans must be used for purposes for which they were obtained.

The apex bank also threatened it would soon publish names of loan defaulters under ACGSF.

“The Fund, if considered necessary, will publish names of defaulters in the newspapers and report the same to the Credit Information Bureau of Nigeria.”

The ACGSF was designed by the CBN to encourage sufficient food production in the country by ensuring farmers have access to soft loans to facilitate their agricultural activities.

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Loans under the programme, according to the apex bank, includes advances, overdrafts and other credit facilities.

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