SEIFAC releases guidelines for N12.5b CBN’s Anchor Borrowers Program.
The CBN Anchor Borrowers Program (ABP) aims to provide loans (in-kind and cash) to smallholder farmers like SEIFAC in order to increase agricultural productivity, create jobs, and cut the food trade deficit in order to preserve the foreign reserves.
The CBN Anchor Borrowers Program (ABP) is one of the programs aimed to promote food security and offer jobs in keeping with the Federal Government’s goal of lifting 100 million Nigerians out of extreme poverty.
The SEIFAC (Smallholder Economic Interest Farmers Agricultural Cooperative) is putting the CBN’s Anchor Borrowers Program (ABP), an agricultural growth plan, into action.
SEIFAC, like other clusters, is a part of the CBN ABP project, and CBN is the program’s sole financier; all monies are held by CBN and can only be paid if clusters follow CBN’s APB guidelines to the letter.
The Federal Government has set out around N12 billion for SEIFAC to encourage the cultivation of agricultural commodities.
The loan would be directed at smallholder farmers around the country who are involved in the production of specific commodities.
For simplicity of administration, the farmers should be organized into groups or cooperatives of 5 to 20 people.
Agricultural Commodities Identified:
The state-targeted goods of comparative advantage include, but are not limited to:
Foodstuffs (Rice, Maize, Wheat, etc.)
Cotton
Tubers and roots (Cassava, Potatoes, Yam, Ginger, etc.)
Sugarcane;
Crops that grow on trees (Oil palm, Cocoa, Rubber, etc.)
Soybeans, sesame seeds, cowpeas, and other legumes
Tomato
Livestock (Fish, Poultry, Ruminants, etc.)
And any other items that the CBN decides to introduce from time to time.
According to SEIFAC, the CBN’s APB guidelines for N12.5 billion loan disbursement have been approved and executed. Everything is in place for CBN to connect APB plans and release funding for the APB program, which SEIFAC considers to be a bona fide and formidable cluster.
SEIFAC has advised all beneficiaries to be more patient as the CBN prepares to release the FG fund.
The Anchor Borrowers’ Program (ABP) was established under the CBN Act of 2007 to establish economic relationships between smallholder farmers (SHF) and respectable firms (anchors) involved in the production and processing of vital agricultural products.
The program arose from discussions with stakeholders including the Federal Ministry of Agriculture and Rural Development, state governments, agro-processors, commodity associations, financial institutions, and smallholder farmers with the goal of increasing agricultural production, diversifying Nigeria’s revenue base, and increasing non-oil exports.
The CBN Anchor Borrowers Program’s Guideline (ABP)
One year after the initial facility expires, the PFI will foreclose on pledged collateral, and the risk-sharing percentage outlined above will apply to the amount net in default.
The loan amount limit for each eligible farmer will be determined using CBN-approved Economics of Production (EOP) and validated land size. The CBN may require repayment in the form of produce and/or cash.
The loans given under the program must be returned in full within the facility’s tenor.
If the facility was obtained through a Commodity Association, the Committee’s leadership is accountable for fully repaying the facility to its participants.
The ABP’s overall goal is to establish business ties between smallholder farmers and processors in order to boost agricultural productivity and maintain food stable prices.
By developing an ecosystem that drives value chain finance, the CBN declared that it would increase bank funding to improve agricultural productivity.
After adequate evidence that the PFI has explored all avenues of loan recovery, the CBN will take up half of the credit risk.
The risk-sharing ratio may be adjusted by the CBN depending on the Anchor/unique project’s characteristics and opportunities.
The PFI shall assume the complete risk and financial damages resulting from the PFI’s negligence and/or inaction in the implementation of any project.
