How to Apply for CBN Agricultural Development Scheme (AADS) Loan

Are you a young Nigeria interested in agriculture? If ‘yes’, this post will guide you on how to easily apply for CBN Agricultural Development Scheme (AADS) Loan. Priorto the evidence that Nigeria economy is gradually diverting from Oil to Agriculture which has taken a tremendous move in this present government, and to promote agricultural produce in the country.

The Central Bank of Nigeria (CBN) has deemed it fit to provide funds to young Nigerians who have interest in Agriculture. It is said that the funding loan has no interest rate.

According to CBN, the scheme aimed at engaging minimum of 370,000 youths across the nation in agricultural production in the next three years which will serve as a means of tackling the issue of unemployment in the country as well as ensuring food security and diversification of economy through increase in agricultural production.

Eligibility of AADS Loan

Beneficiary must be a citizen of Nigeria by birth.
Must be between the age of 18 and 35 years.
And must sign an undertaken with the scheme to abide with its terms of agreement.

Loan Financing

The PFIs will work as a Liaison Officer of the CBN to give the financing elements to the beneficiaries.
Using the CBN approved non-interest financing contract of “Murabaha or Istisna” at an all inclusive rate of return of 9% per annun, the PFIs shall procure the inputs for on-selling to the beneficiaries. Furthermore, the PFI shall engage Service Ijarah or any other CBN recommended contract for NIFIs to finance the labor aspect of the project with the same all inclusive rate of return of 9%.
The tenor of financing is 6 months for grains and broiler production such as maize, rice, soy beans etc; 24 months for egg production and ruminants; 18 months for cassava cultivation and 5 years for perenial crops.
Availability of Finance: The average financing capital available for arable crops is N250,000 per ha; the average financing capital for livestock is N500,000 per unit and N1.5 million for perenial crops like oil palm, cocoa, cashew and orange.

Marketing

An undertaken of agreement shall be signed by the Anchors, processors and Aggregators with PMT.
Off-take of farm produce shall be on the basis of payment and delivery (Cash and carry).

Roles of the contributing factors are listed below

Participating Financial Institution (PFI) shall;

Access funds from the CBN to the successful (eligible) agripreneurs.
Manage and control thorough process of account opening and credit appraisal.
Make sure that payment for all the equipment to be procured are payed directly to the merchant while the PFI takes claim on them.
Enlighten the agripreneurs on the actual rate of return as approved by CBN.
Ensure that the BVN of the beneficiaries are registered on the National Collateral Registry (NCR).
Supervise the beneficiaries to make sure that they make judicious use of facilities provided.
Oversee projects.

Input suppliers and Service providers shall:

Make sure that inputs/services are delivered on time.
Provide support on usage of equipment and others when/where necessary.
Ensure prompt replacement of inputs with deficiencies which are supplied to the beneficiaries within 5 working days of receiving such report from the beneficiaries.
Ensure provision of effective customer services as touching feedback and complaints management.

Beneficiaries shall:

Take absolute responsibility of the farm management.
Be honest and diligently abide by the terms and condition of the engagement.
Provide guarantor for refunding of finance in case of necessity.
Be ready to work with Agricultural Extension Workers.
Ensure refund of financing facility as agreed upon by handing over the output to the anchor or state.