Anchor Borrowers Programme raises smallholder farmers funding hopes
The Anchor Borrowers Programme has raised smallholder farmers funding hope. Over N554.61 billion released for the Programme (ABP) in nearly six years of implementation remains a major source of funding and input supplies for smallholder farmers across several sates of the federation.
ABP was created to increase banks’ financing to the agricultural sector and create economic linkage between smallholder farmers and reputable large-scale processors.
Before now, funding agricultural businesses and value-chains were herculean task for many financial institutions. Banks and other financial institutions gave out loans to farmers at double digits, and demanded security for the loan guaranty.
The stringent conditions set by the lenders made it difficult for smallholder farmers to access the needed funds for their operations and when the funds came, they were too costly to sustain their businesses.
However, all these challenges began to ease after the Anchor Borrowers’ Programme (ABP) was instituted by the Central Bank of Nigeria (CBN) to draw from the Micro, Small and Medium Enterprises Development Fund (MSMEDF) to sustain agricultural businesses and value-chains.
“Over the years of the ABP implementation, the CBN says 3.8 million farmers have so far benefited from the scheme.”
The Director, Development Finance Department of the bank, Yila Yusuf, said, “The ABP has helped farmers improve their yields. For maize, we now do five metric tonnes per hectare and for rice, we’re improving from four metric tonnes to 10 metric tonnes per hectare. We will be trying out some Brazilian seeds that we will give to the anchors and their association.
The new breakthrough in agricultural credit to farmers was made possible by the ABP and several other intervention programmes instituted by the CBN to lift the agricultural sector and support food sufficiency.