Recently, the Central Bank of Nigeria (CBN) reported that out of a total of N622 billion disbursed by the bank to commercial banks under the Commercial Agricultural Credit Scheme (CACS), about N387.2 billion has been repaid. This signifies that Nigerian farmers are meeting up with loan repayment under the Anchor Borrowers Programme (ABP). Taiwo Hassan reports
Indeed, one of the biggest obstacles confronting the country’s agric sector from attaining its potential to enhance national food security and productivity has been the issue of accessibility to credit facility.
In fact, the lack of agric loan to local farmers has been a major issue discussed in many agric fora in the country as it brings setback to the growth and development of the country’s agric sector.
However, since the inception of the current administration under President Muhammadu Buhari, there has been a shift in Nigeria’s agric value chain following a Presidential order that the CBN should create an Anchor Borrowers’ Programme strictly for Nigerian farmers to solve the funding challenge in the agric sector.
Since then, the ABP has been full of various testimonies from Nigerian farmers, who have been facing access to credit challenge, coupled with high interest rate, cumbersome bank processes and getting loans from commercial banks.
One of the most interesting aspects of the ABP is that the loans giving to the farmers come in single digit that attracts nine per cent interest rate compared to the 30-35 per cent the commercial banks charge for loan taking.
Reasons for apathy
Indeed, findings had shown that because of the business environment challenges and lack of infrastructure in the country, many financial institutions in the country are discouraged from lending to investors, businessmen/women, farmers and others for startups.
The rise in non-performing loans has also been a major factor. This has prompted the banks to jerk up their interest rate for customer willing to secure loans for business.
However, Nigerian farmers are mostly affected as high interest rates remain the bane of financing agriculture and development of good agricultural practices.
Particularly, a situation where commercial banks request for as much as 30 per cent interest on agricultural loans is capable of crippling government’s policy of economic diversification through agriculture.Having realised the turbulent challenges facing Nigerian farmers in the process of securing loans, the Federal Government, through CBN, came to the rescue of farmers by initiating ABP.In addition, the apex bank also approved lending of special intervention fund to […]
