CBN Unveils Rules for Anchor Borrowers Scheme

By Dipo Olowookere

Guidelines for the Anchors Borrowers’ Programme (ABP) have been released by the Central Bank of Nigeria (CBN).

The CBN’s ABP was established to assist Nigerian farmers as a way of achieving the present government’s diversification goal.

Posting the guidelines on its website, the CBN said funding for the programme will be derived from the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), adding that, “Interest rate under the ABP shall be guided by the rate on the N220 billion MSMEDF, which is currently at 9 percent per annum (all inclusive, pre and post disbursement).”

It explained that the tenure of “loans under the ABP shall be the gestation period of the identified commodities,” while the repayment would be when the “harvested produce that shall be mandatorily delivered to the Anchor at designated collection centre in line with the provisions of the agreement signed. The produce to be delivered must cover the loan principal and interest.”

In the guidelines post by CBN on Wednesday, it listed the identified agricultural commodities as cereals (rice, maize, wheat etc.), cotton, roots and tubers (cassava, potatoes, yam, ginger etc.), sugarcane, tree crops (oil palm, cocoa, rubber etc.), legumes (soybean, sesame seed, cowpea etc.), tomato, livestock (fish, poultry, ruminants etc.) and any other commodity that will be introduced by the CBN from time to time.

However, the apex bank emphasised that the “Anchor shall be private large-scale integrated processors who have entered into an agreement with the SHFs to off-take the harvested produce at the agreed prices or as may be reviewed by the PMT.”

It also noted that “state governments may act as Anchor upon meeting the prescribed conditions,” stressing that there are “two models of administration of ABP based on the anchor arrangement namely: Private Sector-led and State windows.”

“Under each model, a Project Management Team (PMT) shall be established to coordinate the implementation of the programme,” the bankers’ bank said.

Also under the guideline, “A mandatory training programme shall apply for farmers that will participate under the ABP covering; Farming as a business, Improved agricultural practices and Group management dynamics.”

It explained that, “The cost of such training shall be borne by the participating anchor. However, partnerships with Development Partners are encouraged on the training of the farmers.

“Certificates issued at the end of the training shall constitute a requirement for farmers to access credit facility in kind and cash under the programme.

Check full guidelines here: https://www.cbn.gov.ng/Out/2017/CCD/Anchor%20Borrowers%20Programme%20Guidelines%2002-01-17.pdf