ANCHOR BORROWERS’ PROGRAM
As part of our never ending quest to keep you updated with the best information, we have developed a Q&A on the recently introduced Anchor Borrowers’ Program (ABP). These Questions are not all exhaustive, hence this appeal to members to feel free to ask questions which may not have been captured on this write-up and we will update this Q&A.
Q: WHAT IS THE ANCHOR BORROWERS’ PROGRAM (ABP)?
The Central Bank of Nigeria (CBN) in line with its developmental function established the Anchor Borrowers’ Program (ABP). The Program which was launched by President Muhammadu Buhari (GCFR) on November 17, 2015 is intended to create a linkage between anchor companies involved in the processing and small holder farmers (SHFs) of the required key agricultural commodities. The program thrust of the ABP is provision of farm inputs in kind and cash (for farm labor) to small holder farmers to boost production of these commodities, stabilize inputs supply to agro-processors and address the country’s negative balance of payments on food. At harvest, the SHF supplies his/her produce to the Agro-processor (Anchor) who pays the cash equivalent to the farmer’s account.
Q: WHO ARE THE TARGETED BENEFICIARIES
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.
Q: WHAT ARE THE IDENTIFIED AGRICULTURAL COMMODITIES
The targeted commodities of comparative advantage to the State shall include but not limited to:
A. Cereals (Rice, Maize, wheat etc.)B. CottonC. Roots and Tubers (Cassava, Potatoes, Yam, Ginger etc.)D. SugarcaneE. Tree crops (Oil palm, Cocoa, Rubber etc.)F. Legumes (Soybean, Sesame seed, Cowpea etc.)G. TomatoH. Livestock (Fish, Poultry, Ruminants etc.)Any other commodity that will be introduced by the CBN from time to time.
Q: WHERE DOES NFG-CS COME IN
In 2017, CBN expanded the Anchor Borrowers’ Program (ABP) to include Agricultural Commodity Associations of the targeted Produce in an effort to expand the implementation of the ABP. This decision was taken to further ramp up domestic production of identified commodities by leveraging the existing organized structures of the agricultural associations nationwide, thereby providing huge economics of scale in the implementation of APB.
In simple terms, NFG-CS will be leveraging her size and existing structures to help enroll registered members for the ABP.
Q: WHAT STRUCTURE WILL THIS INTERVENTION TAKE?
The CBN, through FCMB will provide financial suppport to registered members of the Cooperative who maintain accounts with the Bank. This support will cover the costs of farming between one (1) to five (5) Hectares under the supervision of the Cooperative.
This means that the ABP granted to Cooperative Members is to empower them invest in the ongoing farming season of the Nigeria Farmers’ Group & Cooperative Society (NFG-CS). Qualified members will have Hectare(s) of Land farmed in their name under the management of the NFG-CS.
Q: DO I NEED COLLATERAL TO ACCESS THE FUNDS?
No! NFG-CS is undertaking to provide security for members who qualify for the Program. NFG-CS Lands will be used as collateral for accessing the Funds by Qualified members.
Q: WHICH CROPS CAN I FARM WITH THE NFG-CS?
Qualified members for the ABP can subscribe for the following crops:
A. MaizeB. BeniseedC. SoyabeansD. Cowpea
Q: HOW WILL THE INTERVENTION FUND BE DISBURSED?
The CBN will provide this support to qualified members directly to their FCMB operational accounts. However, Qualified beneficiaries will not be able to access this fund for anything less than what it was intended for, that is, subscribing with the Cooperative for specific crop and Hectare(s) which the funds provides for.
Q: WHAT ARE THE CONDITIONS FOR QUALIFICATION?
A. Intending Beneficiary must be a fully registered member of the Cooperative.B. Intending Beneficiary must maintain an FCMB account with at least a balance of N2,000.C. Intending Beneficiary must sign an undertaking to have a lien placed on their account if they qualify for the program. The lien will limit them from withdrawing from the account until the provided funds is used for the purpose it was provided.
For More Information on the Anchor Borrowers’ Program, kindly read through this document prepared by the Central Bank of Nigeria.