CBN counters IMF, says 52% Anchor Borrowers loan repaid

At Central Bank of Nigeria has said that total loan repayments in the Anchor Borrowers’ Program (ABP) stood at 52 percent in February.

CBN said in reaction to the report by International Monetary Fund (IMF) which stated that only 24 percent of the loans entered under the ABP have been repaid.

In a new report titled ‘Nigeria’s chosen issue’, the fund said agricultural credit in Nigeria has not boosted production despite challenges in targeting the right recipients for the credit.

But in a statement released on Monday by the acting director of the corporate communications department at the CBN, AbdulMumin Isa, the apex bank disclosed that it had released N1.079 trillion on February 28, of which N960 billion was due for repayment.

Mr. Isa said ABP supports about 4.57 million smallholder farmers who cultivate more than 6.02 million hectares of 21 commodities across the country.

He listed commodities including rice, wheat, cowpea, millet, corn, cotton, fish, soybean, poultry, cassava, groundnut, ginger, sorghum, palm oil, cocoa, sesame, tomato, castor seed, yellow pepper, onion , and cows/milk.

According to statistics from the Food and Agriculture Organization (FOA), Pak Isa noted that ABP also contributed significantly to the increase in national commodity output, with the peak of corn and rice at 12.2 and 9.0 million metric tons in 2021 and 2022, respectively.

He said the program has also helped improve the national average yield per hectare of the commodity, with productivity per hectare almost doubling in the eight years of the Program’s implementation.

He also said that repayments under the ABP were made in cash or produced by the beneficiaries.

The CBN spokesperson explained that outstanding loan balances are still in moratorium due to the COVID-19 forbearance granted to the beneficiaries of the bank intervention in March 2020 and extended until February 2022.

“It should be noted that the tenor of the loan in ABP is based on the gestation period of the commodity. For example, the loan given to farmers who cultivate annual crops can be up to seven years,” he said.

He noted that the bank’s intervention, with the core objective of strengthening the productive base of the economy, continues to support investment in capital assets in sectors with high and elastic growth potential.

“The Central Bank of Nigeria remains committed to its development mandate to stimulate access to finance for the real sector, especially agriculture, as it continues to support the efforts of the Federal Government for food security and economic growth. Therefore, the Central Bank of Nigeria continues to accept applications from eligible Nigerian farmers and companies in Anchor Borrowers Program,” he added.

ABP

The ABP was launched in November 2015 by President Muhammadu Buhari to boost agricultural production and reverse Nigeria’s negative balance of payments in food.

Smallholder farmers who cultivate cereals (rice, maize, wheat, etc.), cotton, roots and tubers, sugarcane, trees, beans, tomatoes, and livestock are those captured in this initiative.

Loans are channeled to beneficiary farmers through Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), and Micro Finance Banks (MFBs), which the program recognizes as Participatory Finance Institutions (PFIs).

According to the guidelines of the program, during harvest, the farmer pays his loan by bringing the crop to the ‘anchor’ who pays the same amount to the farmer’s account.