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Participants of the Agriculture Development Scheme will receive N2 billion to develop farmlands and payback with CBN directives.
As part of its development mandate, the Central Bank of Nigeria (CBN), introduced the Accelerated Agriculture Development Scheme (AADS) for agricultural financing.
The CBN will collaborate with state governments to engage 370,000 youth in agricultural production.
The scheme will increase financial access to those looking to harness possibilities in Agriculture thereby create food security.
Getting Fund Under the CBN Agriculture Development Scheme
AADS is a private sector-led program and will secure funding from the Anchor Borrowers’ Programme (ABP). With a maximum of N2 billion per recipient, the debt will be repaid from the Economics of Production (EOP) for cultivating on approved farmlands.
The intervention will obtain an interest rate of 5.0% p.a., all-inclusive up to February 28, 2021, and 9% p.a. all-inclusive by March 1, 2021.
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The loan tenor for annual crops is a maximum of six years, interim of six months. For perennial crops, a maximum tenor of ten years, one year of a moratorium.
CBN also has a specific list of crops that qualify in the scheme.
Since the CBN is taking up to 50% of the credit risk. Therefore, participant of the AADS scheme will place the title of their properties (land) as collateral. The scheme will also accept other collateral designed by the ABP.
Participants can repay in instalments over the EOP of the cultivated commodities.
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The CBN will monitor the projects financed under the intervention scheme periodically along side the PB.
With the primary objective of producing agricultural commodities, the CBN intervention scheme will also be creating jobs and diversifying the economy.
The scheme also targets stakeholders with an interest in unlocking land for agriculture through appropriate financing.
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