Just 24% of the loans disbursed by the Central Bank of Nigeria’s Anchor Borrowers’ Programme have been repaid, according to information provided by the International Monetary Fund.
This statement was contained in the IMF’s Selected Issues paper on Nigeria, which was prepared by a staff team of the fund as background documentation for the periodic consultation with the country.
It was said that the paper was created on January 12, 2023, using the information that was accessible at the time.
Notwithstanding the difficulty in identifying the proper users for the credit, the IMF reports that agricultural credit in the nation has not considerably increased productivity.
It stated, “Difficulties in identifying the appropriate users may be connected with the limited influence of agricultural credit on production growth.”
The CBN permits farmers to pay under the ABP in kind or cash, although the IMF noted that repayments have been extremely low.
According to the publication, “Repayment is also modest for the Anchor Borrowing Programme at 24%, especially as payback can be paid in kind, restricting the term of the loans to one year.
“The recipient loans are not always adequately targeted, and occasionally the cash is used for other purchases (e.g., new agricultural input trading enterprises to extract trade rents)” are all contributing factors to the issue.
Also, it was mentioned that the Anchor Borrowers Programme, which was started in 2016, initially set aside N40 billion to help farmers by providing loans with a single-digit interest rate.
However, through mid-2022, over N1 trillion had been disbursed from this scheme, with CBN supplying an increasing amount of the banking system’s agricultural finance.
According to the All Farmers Association of Nigeria, the majority of those receiving the CBN’s billions of naira under its Anchor Borrowers’ Scheme were not Nigerian farmers in December 2022.
Notwithstanding the CBN’s protests, AFAN maintained that the loans were difficult for the central bank to recoup because they were given to non-farmers who were not included in the association’s database.
“Our members have benefited from the program, but the majority of those who have gained from the ABP are not Nigerian farmers,” stated Yunusa Yabwa, the National Secretary of AFAN. I had to tell you that.
This is the reason the CBN, NIRSAL, and commercial banks, who served as the distribution channels for this money, are upset that the loan recipients aren’t making payments.
