SEIFAC Implements CBN’s APB Guidelines for N12.5B Loan Disbursement

SEIFAC Implements CBN’s APB Guidelines for N12.5B Loan Disbursement

The CBN Anchor Borrowers Program (ABP) is aimed at providing loans (in-kind and cash) to smallholder farmers like SEIFAC to boost agricultural production, create jobs, and reduce food import bills toward the conservation of the foreign reserve.

In line with the Federal Government agenda to lift 100M Nigerians out of strict poverty, the CBN Anchor Borrowers Program (ABP) is one of the programs designed to boost food security and provide jobs

The Smallholder Economic Interest Farmers Agricultural Cooperative (SEIFAC) is vigorously implementing the CBN’s Anchor Borrowers Program (ABP), an agricultural expansion initiative

Like other clusters, SEIFAC is part of the CBN ABP initiative and CBN is the sole financier of the program, all funds are with CBN, and can only be disbursed if clusters implement CBN’s APB guidelines diligently

Over N12Billion was earmarked for SEIFAC by the Federal Government to foster the cultivation of agricultural commodities

The loan shall be targeted at smallholder farmers engaged in the production of identified commodities across the country.

The Farmers should be in groups/cooperative(s) of between 5 and 20 for ease of administration.

Identified Agricultural Commodities:

The targeted commodities of comparative advantage to the states shall include but are not limited to:

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 commodities that will be introduced by the CBN from time to time.

SEIFAC has completed and implemented CBN’s APB guidelines for N12.5B Loan Disbursement, the SEICFAC disclosed. All is set for CBN to relate APB plans and release funds for the APB program which SEIFAC is a boni-fade and formidable cluster

SEIFAC has directed all beneficiaries to exercise more patience as CBN is on the verge of releasing the FG fund

CBN Act 2007, recognized the Anchor Borrowers’ Program (ABP) to create economic linkages between smallholder farmers (SHF) and reputable companies (anchors) involved in the production and processing of key agricultural commodities.

The program 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 revenue base of Nigeria.

Guideline For The CBN Anchor Borrowers Program (ABP)

The PFI shall foreclose on pledged collateral one year after the expiration of the initial facility and the risk-sharing ratio prescribed above shall apply to the amount net in default.

The maximum loan limit for each eligible farmer under the program 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 program 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 the facility granted to its members.

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 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.

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