Africa-Press Nigeria
The Central Bank of Nigeria (CBN) has agreed to bear 50 per cent credit risk participants of the Accelerated Agriculture Development Scheme incurred with the loan.
This is contained in the guidelines for the private sector-led Accelerated Agriculture Development Scheme released by the CBN yesterday signed by its Director Development Finance Department, Mr. Yusuf Yila Philip.
According to the guideline, “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 (ABP).
Repayment of the facility the CBN said will be made “on installment basis through the participating banks and spread over the Economics of Production (EoP) of the cultivated commodities.
In addition, the participating banks are expected to “remit repayments received to the CBN on quarterly or annual basis depending on the commodity financed”.
The maximum loan accessible under the Scheme has been pegged at “N2 billion per obligor. The facility shall be repaid from the EoP for cultivating on the cleared farmland”.
Accelerated Agriculture Development Scheme (AADS) is a development finance schemes of the CBN introduced to expand access to finance to critical sectors and segments of the economy in order to achieve food self-sufficiency as well as diversification.
The CBN introduced the Accelerated Agriculture Development Scheme (AADS) to engage 370,000 youth in agricultural production, in collaboration with state governments.
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.
According to the guideline, the Central Bank of Nigeria (CBN) shall: Provide the fund; Act as Managing Agent; Issue and review modalities and operating guidelines from time to time; Provide regulatory and supervisory oversight; Monitor, evaluate and conduct impact assessment of the programme in conjunction with other stakeholders and Provide periodic reports on the programme.
The specific objectives of the scheme are 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.
Eligible Participants in the scheme are: Agro-processors of agricultural commodities engaged in backward integration; Prime anchors and commodity associations participating under the Anchor Borrowers’ Programme (ABP) with evidence of contiguous land readily available for clearing and cultivation of agricultural commodities; and Other companies and individuals with evidence of ownership of contiguous land readily available for clearing and cultivation of agricultural commodities.
The major agricultural commodities eligible for consideration under the Scheme are: Rice; Maize; Cassava; Cotton; Wheat; Tomato; Poultry; Fish; Sorghum; Oil Palm; Cocoa; Livestock/Dairy and any other commodities as may be listed by the CBN from time to time.
Prospective AADS participants must be existing or new firms engaged in agricultural production with proven capacity and bankable proposal. They must possess acceptable title for contiguous lands of not less than 20 hectares with good credit record.
