Today CBN has authorised all the commercial banks in Nigeria to start giving up to N2 billion maximum loan to youths interested in going into agriculture.
The loan, which comes under the Accelerated Agriculture Development Scheme (AADS) attract 5% interest rate per annum.
CBN in collaboration with state governments aims to engage 370,000 youth in agricultural production across the country.
According to the loan guideline released on Tuesday and signed by CBN Director Development Finance Department, Yusuf Yila Philip, the maximum loan accessible under the scheme is N2 billion per obligor.
Agricultural commodities eligible for loan consideration
- Fish, and so on.
Yusuf noted that obligors are to have a contiguous land not less than 20 hectares for specified agricultural commodities cultivation.
Also, there must be evidence of land ownership in form of any acceptable title including lease of a minimum of 15 years.
He stated that the Central Bank of Nigeria will bear 50% 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.
The participating banks are to remit repayments received from obligors to the CBN on quarterly or annual basis depending on the commodity financed.
“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.
How to access the loan
Kindly visit your bank