Interest Draw Back Claims
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Claims Settlement Activities
Instituted in year 2004 as a palliative measure for beneficiaries of agricultural loans under ACGSF who are able to repay their loans according to contractual terms, the programme is one of the products initiated by the CBN to encourage financial institutions to participate under the scheme.
The programme, guarantees the payment of 40% as rebate to farmers on the interest component of all loans repaid as at when due, thus reducing the effective borrowing rate for the farmers. Since its inception, it has been able to reach a number of clients as shown in the tables below.
INTEREST DRAW BLACK CLAIM SETTLEMENT
As shown above, the volume and value of claims paid to benefiting customers has been on the ascendancy. Similarly, the number of participating banks has been on the increase.
The Scheme has thus achieved the following objectives:
- Increased participation of banks, as they are assured of adequate repayments of their loans
- Increased outreach to beneficiaries, especially the rural poor (poverty reduction.
- Reduced default claims settlement under the ACGSF.
The Interest Drawback Programme (IDP) is a success story. Since the inception of the IDP loan repayment under the ACGSF has been on the increase. For instance, total loan repayment under the scheme amounted to 26,208 loans valued ^1,171.74 million in 2004; 32,549 loans valued 1,861,097.1million .in 2005 and 25,431 loans valued ^1,623,474.1 million as at September, 2006.
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