What You Need To Know And Do To Get CBN's Non-interest N432bn Loan
The Central Bank of Nigeria (CBN) has announced that funds up to N432 billion will be given to agric producers or farmers involved in rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock/diary. The fund will be financial support for their agric produce which will come in handy during the 2020 wet planting season.
The financial support by CBN is part of the CBN Anchor Borrowers Programme for smallholder farmers. Over 1.1 million farmers in the value chains of nine commodities will benefit from the funds, with over one million hectares of farmland expected to be cultivated by the farmers.
According to the Director, Development Finance Department, CBN, Yila Yusuf, a collective output of 8.3 million metric tonnes of commodities will be produced with the loans given to the farmers. He revealed that “The bank’s funding of the Anchor Borrowers’ Programme for the 2020 season is the highest since the inception of the programme in 2015,”.
The Director of Corporate Communications for CBN, Isaac Okorafor, said farmers will be able to access and benefit from the funds after the policy has been issued, as work has been concluded on the funding document. The new development came on the back of the CBN stating that it would release a framework for the integration of non-interest windows in all its intervention programmes.
What You Need To Know And Do
As the CBN prepares to disburse the N432 billion to farmers dealing with rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock/diary, you need to know those entitled to the funds and how such funds can be accessed. According to the Anchor Borrowers Programme framework, Sources say the Anchor Borrowers Programme is for smallholder farmers involved in the aforementioned commodities. It was stated that the farmers must be in groups/cooperative(s) of between 5 and 20 in order to enable ease of administration.
The money will be sent through designated participating financial institutions which include Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) and Microfinance Banks (MFBs). It was further explained that the "loan amount for each SHF shall be arrived upon from the economics of production agreed with stakeholders."
How To Repay The Loan To CBN
It's learnt that the smallholder farmers will use the harvested produce to repay the loan, delivering the produce to the Anchor, that is the private large-scale integrated processors that entered into an agreement with the smallholder farmers to off-take the harvested produce at an agreed price or as may be reviewed by the PMT. It was also revealed that the State Governments can act as Anchor upon meeting the prescribed conditions.
"Loans granted to the SHFs shall be repaid with the harvested produce that shall be mandatorily delivered to the Anchor at designated collection center in line with the provisions of the Agreement signed. The produce to be delivered must cover the loan principal and interest." The document said. Meanwhile, the loan tenor will be the gestation period of the identified commodities.
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