The Central Bank of Nigeria (CBN) has approved the disbursement of some N432 billion non-interest loans to farmers as part of efforts to further integrate non-interest finance into the national financial structure and boost the country’s agricultural development agenda.
The apex bank said work had been concluded on the non-interest funding document, adding that it would shortly issue the policy guideline that will outline how farmers with bias for alternative finance could apply and benefit from its agricultural programmes.
The CBN stated that the loans will be channeled through Anchor Borrowers’ Programme (ABP) and Targeted Credit Facility (TCF) to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic .
The apex bank said it also plans to fund value chains of nine commodities to the tune of N432 billion in the 2020 wet season. Some of the commodities to be funded are rice, maize, livestock, fish, oil palm, cowpea and poultry among others.
These were disclosed by CBN’s Director, Corporate Communications, Isaac Okorafor and Director, Development Finance Department, Yila Yusuf, who jointly represented the CBN Governor, Mr. Godwin Emefiele, at a stakeholders’ meeting to review the successes recorded under the ABP and the strategies for the 2020 agricultural wet season.
According to Okorafor, the creation of a non-interest window followed appeals by concerned stakeholders for farmers across the country to also be considered for funding under the non-interest window.
Okorafor said the bank, in the 2020 agricultural wet season, was committed to aggressively fund its agricultural programmes and spur farmers along select crop value chains to prevent the country from sliding into a recession, as is currently being experienced in some major economies of the world.
Speaking on the Targeted Credit Facility (TCF) of the bank aimed at alleviating the impact of the corona virus on individuals and small businesses, Okorafor noted that the bank was determined to push the economy to ensure Nigeria does not experience consecutive quarters of negative growth.
According to him, Emefiele, had directed the Development Finance Department of the apex bank as well as the NIRSAL Micro-Finance Bank (NMFB) to fast-track the approval process of loans, which are meant to help restore businesses and livelihoods.
In his remarks, Yusuf, said the target for the 2020 agricultural wet season was to advance about N432 billion, through the participating banks, in the value chains of nine commodities.
He noted that over 1.1 million farmers, cultivating over one million hectares of farmland, were expected to benefit from the loans that will help to produce a collective output of 8.3 million metric tons.
According to him, the focus for the 2020 wet season is to ensure the provision of improved seeds to incentivize the farmers to return to their farms.
He pointed out that the CBN adopted the value chain approach across all the commodities to ensure that every player along the entire value chain, from the farmers through to the processors, was financed.
He said the bank’s funding of the ABP for the 2020 season was the highest since the inception of the programme in 2015, adding that this was quite significant considering the successes recorded in the 2019 season that contributed to shielding Nigeria from any food shortage, particularly rice, in the heat of the global lockdown during which some major producing countries of staples, such as rice, closed their silos and halted the export of those produce from the shores of their respective countries.
Also speaking at the meeting, the Presidents of the Rice Farmers Association of Nigeria (RIFAN) – Alhaji Alhaji Aminu Goronyo; National Cotton Association of Nigeria (NACOTAN) – Mr. Anibe Achimugu; Maize Association of Nigeria (MAN); Maize Association of Nigeria (MAAN) – Alhaji Bello Abubakar; and the Maize Growers, Processors, and Marketers Association of Nigeria (MAGPMAN) – Dr. Edwin Uche attested to the success of the ABP, which they noted had enhanced the value chains of their respective commodities.
While pledging their support to the continued implementation of the ABP to generate employment and create wealth, they promised to ensure that the loans collected by farmers were promptly recovered in order to sustain the programme.