CBN initiates N20b agric scheme with single digit rate
The Central Bank of Nigeria (CBN) has initiated a three-pronged programme under the Anchor Borrowers’ Programme (ABP), to avail farmers in Kebbi State a micro credit from the initially launched N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF).
Under the scheme, CBN has already set aside N20 billion to the farmers at a single-digit interest rate of nine per cent.
Meanwhile, President Muhammadu Buhari will on Tuesday, perform the formal launch of the ABP, scripted to also assist small scale farmers in the state to increase the production and supply of feedstock to agro-processors and rice.
According to a statement from the apex bank, the initiative is aimed at creating an Ecosystem to link Small Holder Farmers to local processors, increase banks’ financing to the agricultural sector,enhance capacity utilisation of agricultural firms involved in the production of identified commodities, as well as the productivity and incomes for farmers.
The policy document also contained plans that will build capacity of banks in agricultural lending to farmers, entrepreneurs in the value chain and ultimately reduce commodity importation.
“It will also reduce the level of poverty among small holder farmers and create jobs, while assisting rural small-holder farmers to grow from subsistence to commercial production levels,” the statement said.
Besides, the scheme will boost extension workers’ capacity, through the implementation of a customized value-chain finance modules for banks and an “agribusiness” training protocol for farmers.
Already, a comprehensive risk mitigation strategy has been incorporated into the ABP model, to ensure feasibility of the programme.
However, other features of this new agricultural initiative include the Identification and selection of Small Holder Farmers, grouping them into viable cooperatives/clusters, registration of the cooperatives, determination of the economics of selection and engagement of banks/ insurance companies.
Moreso, the initiative also include opening of bank accounts by cooperatives/farmers, loan application and disbursement, commencement of agronomic practices and distribution of agro-inputs at recommended periods.
Key Stakeholders in the ABP, beside CBN, include Federal Ministry of Agriculture, state governments, development partners, farmers and agro-allied processors, among others.