Anchor Borrowers: CBN Says Farmers Repaid N503bn, Faults IMF’s Poor Rating

The Central Bank of Nigeria has disclosed that farmers under the Anchor borrowers programme have repaid N503bn representing 52.39 per cent owed as of February 2023.

The Anchor Borrowers Programme was established in 2016, is to support farmers by offering single-digit interest-rate loans.

This was made known by the Acting Director, Corporate Communications Department, AbdulMumin Isa, in a statement on Monday.

This figure, however, contradicts claims by the International Monetary Fund that only 24 per cent of loans disbursed under the Anchor Borrowers’ Programme of the Central Bank of Nigeria have been repaid.

Also Read: In 11 months, FG Records N7.34tn Fiscal Deficit – CBN

The report completed on Jan. 12 noted that although the CBN allows farmers to pay in kind or cash under the ABP, repayments have been very low.

The document read, “For the Anchor Borrowing Programme, repayment is also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.

“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted and occasionally the funding is used for other purchases (e.g., new agricultural input trading companies to elicit trading rents).”

Disputing the claims, Isa explained that N1.079 trillion has been released under the programme, out of which N960 billion is due for repayment.

According to him, the CBN programme has supported 4.45 million smallholder farmers, who cultivated over 6.02 million hectares of 21 commodities across the country.

Citing statistics from the Food and Agriculture Organisation, the acting spokesperson noted that the ABP had contributed significantly to the increased national output of focal commodities, with maize and rice peaking at 12.2 and 9.0 million metric tonnes in 2021 and 2022, respectively.

He said that the outstanding due balance on loans was still under moratorium due to the COVID-19 forbearance granted to beneficiaries of the apex bank’s interventions in March 2020 and extended to Feb. 28, 2022.

“It is pertinent to note that the tenor of loans under the ABP is based on the commodity gestation period.

“For instance, loans granted to farmers cultivating some perennial crops could have up to seven-year tenor,” he said.

He added, “The Central Bank of Nigeria remains committed to its developmental mandate of stimulating access to finance for the real sector, particularly agriculture, as it continues to support the Federal Government’s drive for food security and economic growth. Accordingly, the Central Bank of Nigeria continues to welcome applications from eligible Nigerian farmers and firms under the Anchor Borrowers’ Programme”.