If you’re a farmer that is involved in large-scale farming and you need a loan to boost your agricultural produce, this cbn anchor borrowers program loan application is open for you.
In this article, we will discuss extensively how to apply for the CBN anchor borrower’s program loan, and we will discuss who this loan is meant for, how to apply for this loan and the requirements for the application of this loan.
Furthermore, we will conclude this article by answering some of the most frequently asked questions you might have. Stay tuned and pay close attention.
Overview Of The CBN Anchor Borrower’s Program Loan
The CBN anchor borrower’s program loan is a loan application that has been made available to any or all farmers across the country who are involved in large-scale farming.
For all farmers and cooperatives who are interested in farming in agricultural production clusters, this is a farming model which is aimed at addressing the challenges often faced by smallholder farmers for farming individually at a small scale.
The Central Bank of Nigeria (CBN), in line with its developmental functions as enshrined in Section 31 of the CBN Act 2007, established the Anchor Borrowers’ Programme (ABP) to create
economic linkages between smallholder farmers (SHFs) and reputable companies (anchors) involved in the production and processing of essential agricultural commodities.
The core of the Programme is to provide loans (in kind and cash) to smallholder farmers to boost agricultural production, create jobs, and reduce food import bills towards the conservation of foreign reserves. The Programme evolved from consultations with stakeholders
comprising the Federal Ministry of Agriculture & Rural Development, state governments, agro-processors, commodity associations,
financial institutions and smallholder farmers to ramp up agricultural production, boost non-oil exports and diversify the
the revenue base of Nigeria.
The Revised Guidelines Address current realities and developments in the Anchor Borrowers’ Programme, aimed at promoting best practices in implementing the Programme. The Guidelines recognize the distinctiveness of smallholder farmers, the ABP transactions dynamics, and the Project Management Team (PMT) in the implementation process.
It also adopts measures to ensure the protection of smallholder farmers. It defines eligibility criteria and responsibilities of relevant stakeholders under the Programme, such as the loan limit, interest rate, and tenor; agricultural commodities eligible for financing under the Programme. It outlines the implementation windows and operating models under each window type.
Some Of The Objectives Of This Loan
The broad objective of the ABP is to create economic linkages between smallholder farmers and processors with a view to
increasing agricultural output and ensuring food price stability.
The specific objectives include:
- Increase banks’ financing to improve agricultural productivity by creating an ecosystem that drives value
- Reduce the nation’s food import bill through import substitution and enhanced domestic value addition;
- Create a new generation of farmers through innovative financing to support smart agriculture; and
- Deepen financial inclusion and grow smallholder farmers from subsistence to commercial farming.
- Targeted Agricultural Commodities
List Of Agricultural Commodities Covered In The Program
The agricultural commodities covered under the Programme shall
Include:
- 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.) Any other commodity that the Bank may decide upon from time to time.
CBN Anchor Borrower’s Program Loan Limit
The maximum loan limit for each eligible farmer under the Programme shall be decided based on CBN-ratified Economics
of Production (EOP) and validated and size. This means that the loan limit depends on your eligibility and qualification for the loan you want to obtain
Interest Rate
The Programme Shall be administered at the prevailing interest. The rate for intervention funds as prescribed by the CBN from time to
time.
Tenor
The tenor of loans under the Programme shall be based on the gestation period of the targeted commodity.
Repayment
Repayment shall be by produce and cash as 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 facilities granted to its members.
Collateral Requirements
The collateral requirements under the Programme shall be as
stipulated below:
- a)State Governments –Irrevocable Standing Payment Order (ISPO).
- b)Commodity Associations/Cooperatives
Combination of the following:
- Joint and cross-guarantee of members;
- .Equity contribution by the farmers of a minimum of 10 percent of the loan amount as a lien with the PFI;
- salary domiciliation of beneficiaries for workers’ cooperatives;
- Personal guarantees of the leadership (Executives and Board of Trustees) supported by individual statements of net worth;
- Executed Global Standing Instruction (GSI) mandate;
- Tite on farmland;
- All assets debenture shall be registered with NCR.
Smallholder Farmer shall:
- Be a member of a farmer group;
- have a bank account with the PFI;
- provide a valid Bank Verification Number (BVN);
- Not be a defaulting borrower;
- have validated farmland;
- provide a 10 percent minimum equity contribution;
- not participate under multiple associations in one cropping season.
Procedures for Accessing ABP Facility
The following are the procedures for accessing the ABP facility:
- Expression of Interest from anchor to the PFI;
- Expression of Interest from PFI to the CBN in favor of Anchor, Commodity Association Cooperative, and State Government indicating the targeted agricultural commodities;
- The PFI shall upload the farm and farmers’ details on the CBN system;
- Upon the notification to stakeholders, PMT begins operations by overseeing the initial meeting to review the checklist and agree on verification;
- The PMT shall organize Town Hall Meetings to decide on the Economics of Production (EoP), offtake price, and other relevant issues;
- .PFI, anchor, and farmers’ representative shall sign a tripartite agreement;
- Upon receipt of a validated list of farmers from the PFI, the service providers shall commence mapping of farmlands;
Frequently Asked Questions
How to register for a CBN loan?
If you’re among those who wish to apply for a CBN loan, you are encouraged to visit an eligible PFI bank. Once you arrive, indicate your interest in applying for a CBN loan. If you already know what scheme (mentioned above) you would like to apply for, you may say this at the time of application.
How does the anchor borrowers Programme work?
The program thrust of the ABP is a provision of farm inputs in kind and cash (for farm labor) to smallholder farmers to boost production of these commodities, stabilize inputs supply to agro processors and address the country’s negative balance of payments on food. All this helps to increase the number of agricultural products produced in the country.
Is Anchor lending safe?
The anchor lending operates on principal safety, and the anchor protocol uses a process called collateral liquidation to ensure that the depositor’s principal is safe and protected at all costs. The subsequent deposits are secured as long as they are over-collateralized.
How do I apply for Seifac?
How to Apply for SEIFAC Loan From CBN
Another funding is here for farmers. …
This is where it becomes exciting
Step 1: Head straight to www.seifac.org
Step 2: Click on the register as a member.
Step 3: Check your inbox to confirm your email
Conclusion
Borrowing money from CBN is one reliable means of sorting yourself out. We are confident that it has been helpful. For questions we may not have answered in the article, feel free to ask in the comments section.
