Another next big thing has come to Nigeria. It’s a new CBN loan to farmers across the country. Read carefully to the end.
The Central Bank of Nigeria (CBN) has launched another programme to provide up to N2 billion to farmers across Nigeria.
This is contained in a guideline for the regulation of the Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS), in order to boost private sector staple food production, industrial raw materials and support food security, job creation and economic diversification in the country.
CBN in a circular signed by Yusuf Philip, director, development finance department, and published on its official website, said the programme was to address food security and youth unemployment challenges across the country.
The CBN created the Accelerated Agriculture Development Scheme (AADS) to engage 370,000 youth in agricultural production, in collaboration with state governments.
However, the apex bank said that P-AADS was developed to complement AADS by exploring private sector partnership to facilitate more rapid land clearing for production of key agricultural commodities.
Part of the CBN statement reads as;
“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 CBN guidelines noted that the maximum loan accessible under the Scheme shall be N2 billion per obligor, while the loan shall be re-paid from the Economics of Production (EOP) for cultivating on the cleared farmland.
The interest rate under the intervention is 5.0% per annum (all-inclusive) up to 28th February 2021, while the interest on the loan from 1st March 2021 shall be 9 % per annum (all-inclusive).
According to the CBN guidelines, the Private Sector-Led Accelerated Agriculture Development Scheme shall be funded from the Anchor Borrowers’ Programme (ABP).
Annual crops: Maximum tenor of six (6) years with six (6) months moratorium.
Prospective P-AADS participants must:
- Be existing or new firms engaged in agricultural production with proven capacity and bankable proposal
- Possess acceptable title for contiguous lands of not less than 20 hectares
- Have good credit record
- Be able to provide the required collateral for participation, and
- Provide evidence of capacity to cultivate a focal commodity directly or engagement of farmers, including youths as in-growers or out-growers to cultivate on the land after clearing
You can download the full CBN GUIDELINES FOR THE PRIVATE SECTOR-LED ACCELERATED AGRICULTURE DEVELOPMENT SCHEME <<<