NIGERIA: Anchor Borrowers Programme risks crumbling owing to unprecedented loan defaulting from farmers

Loan lending scheme on its knees due to massive defaulting [Image: courtesy]
Nigeria—Anchors Borrowers Programme a loaning scheme intended to create linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of required agricultural commodities, has been shaken due to massive loan defaults by borrowers.

The loan scheme launched in 2015 by the Nigerian Federal government, through the Central Bank of Nigeria (CBN) was designed to boost agricultural yields, halt large volumes of food importation and address negative trade balance.

According to the program’s guidelines, it’s stipulated that upon harvesting benefitting farmers are to repay their loans with produce to an anchor, who pays the loan with the cash equivalent to the farmer’s account.

An anchor could either be a private large-scale integrated processor or a state government.

The CBN governor Godwin Emefiele revealed by the second quarter of 2021, 3,107,890 farmers had been empowered under the scheme to cultivate 3,801.397 hectares of land and produce 21 commodities, leveraging the services of 23 financial institutions acting as direct links to farmers.

The scheme helped different states in the Northwest region among them are Kano, Kaduna, Katsina, and Kebi.

Rice production in Kebi state suddenly rose high and the yields became beneficial, which saw the governor of Kebi State, Atiku Bagudu getting into partnership with his then Lagos State counterpart, Akinmuni Amdode. While Kebi produced the rice, Lagos marketed it.

However, several farmers in other Northwest states have not been able to settle their loans from the CBN, largely because of the activities of bandits and insurgents.

Muhammad Augie, the chairman of the Kebbi State chapter of the Rice Framer Association of Nigeria (RIFAN) had alleged that of the 70,000 farmers that benefitted from the ABP loans in 2015, about 200 farmers were able to repay their loans.

“We find it very difficult to recover this loan, we have to resort to taking the farmers to court,” Mr.Augie told a journalist.