The Apex bank recently released the guidelines for the Anchor Borrowers Programme (ABP) aimed at creating new farm entrepreneurs among other objectives. The ABP which was launched in November 2015 is targeted at Small Holder Farmers (SHF) engaged in the production of identified commodities across the country.
Farmers who are expected to be in groups of cooperatives must have gone through some mandatory training programme and must be involved in the cultivation of the following agricultural produce:
• Cereal (Rice, Maize, Wheat etc )
• Root and Tuber (Casava, Potatoes, Yam, Ginger etc)
• Tree Crops (Oil palm, Cocoa, Rubber etc)
• Legumes (Soybean, Sesame Seeds, Cowpea etc)
• Livestock (Fish, Poultry, Ruminants etc)
• And any other commodities that will be introduced by CBN
The anchor is the agro processor which can also be a state government that have met the prescribed conditions. They are large scale integrated processor that must have entered into agreement with SHF to take off the harvested produce at agreed price.
Project Management Team (PMT)
The PMT are responsible for the management and administration of the funds. They can either be private sector led or state government led. The PMT consist of all stakeholders which include representatives of CBN, anchor firms, farmers associations, participating banks, Nigerian Agricultural Insurance Corporation and other stakeholders.
Objectives of Anchor Borrowers Programme
The main objective of the programme is to link the SHF with large scale Agro processors so as to increase agricultural output and improve capacity utilization of agro processors.
Other objectives includes.
• Reduce agro commodity importation and conserve external reserve.
• Increase bank funding of agricultural sector in line with the CBN financial inclusion drive.
• Create new generation of farm entrepreneurs and employment.
• Assist rural SHF to grow from subsistence to commercial production.
Loan Details for Anchor Borrowers Programme
Amount: The loan amount will be arrived at from the economic of production agreed by stakeholder.
Equity Contribution: SHF are expected to contribute minimum of 5% equity
Rate: 9% all inclusive pre and post disbursement.
Tenor: In line with the gestation period of the commodity
Repayment: All loans under this scheme are to be repaid with the harvested produce to be mandatorily delivered to the anchor. The produce to be delivered must cover loan principal and interest.
Collateral: -Cross and several guarantee of framers in cooperative or group to be registered by the National Collateral Registry (NCR)
-Tripartite agreement signed by the SHF, the Anchor and the PMT