Anchor Borrowers Programme 2022 (ABP): The Anchor Borrowers’ Programme (ABP) guidelines have been updated by the Nigerian Central Bank.
The apex bank revealed this in a document titled “Anchor Borrowers’ Programme (ABP) Guidelines” published by its Development Finance Department in September 2021.
Anchor Borrowers Programme 2022 (ABP)
Since the program’s commencement in 2015, 3.8 million farmers have benefitted from the Anchor Borrowers’ Programme (ABP), with N554.61 billion distributed to participants.
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This year’s initiative follows President Buhari’s March 2021 declaration that he had allocated a sum of N600 billion to take advantage of this year’s rainy season and boost food production.
The program was developed in consultation with stakeholders including the Federal Ministry of Agriculture and Rural Development, state governments, agro-processors, commodity associations, financial institutions, and smallholder farmers to increase agricultural production, boost non-oil exports, and diversify Nigeria’s revenue base, according to the apex bank.
CBN revises guidelines
The main goal of the program is to provide smallholder farmers with loans (both in kind and cash) in order to increase agricultural production, create jobs, and reduce food import bills in order to conserve foreign reserves.
The ABP’s overall goal is to establish economic ties between smallholder farmers and processors in order to boost agricultural output and maintain food price stability.
- The CBN stated that it would increase banks’ financing to improve agricultural productivity by creating an ecosystem that drives value chain financing.
- The CBN would bear 50% credit risk after satisfactory evidence that every means of loan recovery has been exhausted by the PFI.
- The CBN may vary the risk-sharing ratio based on the specific peculiarities/prospects of the Anchor/Project.
- For losses arising from the negligence and/or inaction of the PFI in the execution of any project, the PFI shall bear the full risk and financial losses thereof.
- The PFI shall foreclose on pledged collateral one year after expiration of the initial facility and the risk-sharing ratio prescribed above shall apply on the amount net in default.
- The maximum loan limit for each eligible farmer under the Programme shall be decided based on CBN ratified Economics of Production (EOP) and validated land size. Repayment shall be by produce and/or cash as may be prescribed by the CBN.
- The loans granted under the Programme shall be fully repaid within the tenor of the facility.
- Where the facility was accessed through a Commodity Association, the leadership of the Association shall be responsible for full repayment of facility granted to its members.
The revised Guidelines, according to the CBN, address current realities and developments in the Anchor Borrowers’ Program, with the goal of promoting best practices in the program’s implementation.
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