CBN Orders Banks To Give N2b Agric Loan To Nigerian Youths, See How To Apply Here

Philip said the country’s population pyramid is bulging around the youth segment, with an estimated 75 per cent of the population identified to be aged below 35 years, saying a large segment of this population would have eked out a living if adequate opportunities were harnessed in agriculture given its potential of employing over 70 per cent of the nation’s workforce.

He listed agricultural commodities eligible for consideration under the scheme as rice, maize, cassava, cotton, wheat , tomato, poultry and fish, among others.

Philip said obligors are to have a contiguous land of not less than 20 hectares provided for specified agricultural commodities cultivation. Also, there should be evidence of land ownership in form of any acceptable title including lease of a minimum of 15 years.

He said the CBN will bear 50 per cent of the credit risk in the event of default by the participant while repayment of the facility will be made on installment basis through the participating banks and spread over the Economics of Production (EOP) of the cultivated commodities.

Participating banks are to conduct due diligence on prospective obligors, access funds from the CBN for on-lending and ensure that payments are made directly to mechanization service providers for the land clearing.

The participating banks are to remit repayments received to the CBN on quarterly or annual basis depending on the commodity financed.

The Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS) was also developed to complement AADS by exploring private sector partnership to facilitate more rapid land clearing for production of key agricultural commodities.

The facility shall be repaid from the Economics of Production (EOP) for cultivating on the cleared farmland.

“Interest rate under the intervention shall be five per cent per annum (all inclusive) up to 28th February 2021. Interest on the facility from 1st March 2021 shall be nine per cent per annum (all inclusive),” the guidelines said.

The collateral to be pledged by participants under the scheme shall be title of the cleared land and other acceptable collateral prescribed under the Anchor Borrowers Programme.

The CBN, in line with its developmental mandate, continues to develop and introduce development finance programmes and schemes to expand access to finance to critical sectors and segments of the economy to achieve food self-sufficiency as well as diversification.

The broad objective of the P-AADS is to facilitate increased private sector agricultural production of staple foods and industrial raw materials, as well as support food security, job creation and economic diversification.

The P-AADS is expected to fast track land clearing for primary production of agricultural commodities, promote food security through the provision of large contiguous land for agricultural production across all states; collaborate with agro-processors engaged in backward integration by providing financing for extended land clearing in proximal locations for cultivating commodities for supply of industrial raw materials; support other capable stakeholders interested in unlocking land for agriculture through appropriate financing; and engender job creation for individual farmers that will cultivate on the cleared land.

 

Anchor/commodity association/processor submits Expression of Interest (EOI) with all requisite documents including crop to cultivate, to participating banks for consideration.