Some stakeholders have decried the low recovery of loans granted to some farmers under the Anchor Borrowers Programme (ABP).

At its inception in November 2015, the ABP was designed by the CBN to provide farm inputs in kind and cash to smallholder farmers.

The aim was to boost the production of food commodities, stabilise input supply to agro-processors, and address the country’s negative balance of payments on food.

By 2022, the apex bank had revealed that at least 4.8 million farmers had benefited from the programme.

But the programme has been marred by loan defaults, even as food prices rose significantly within the years it took effect.

According to the International Monetary Fund (IMF), 76 per cent of the loans collected by beneficiaries have yet to be repaid.

The IMF said that agricultural credit in the country had not succeeded in increasing production due to the difficulty in reaching the targeted farmers.

It said that although the CBN allowed farmers to pay in cash or give the central bank produce of the same value under the ABP, repayments had been very low.

“For the Anchor Borrowing Programme, repayment is also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.

“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted, and occasionally the funding is used for other purchases,” it said.

Various farmers’ associations also said that the loans were not disbursed adequately, hence the difficulty in ensuring repayment.

Yunusa Yabwa, the national secretary of the All Farmers Association of Nigeria (AFAN), said that the ABP was abused, adding that it did not meet expectations to boost food production.

He said that most beneficiaries of the programme were not farmers.

“Many people collected the loan to invest in other projects, not farming, and that is why it is difficult to ensure repayment.

“The ABP is a laudable programme, but there are challenges to recovery.

“Some of our members benefited from it, but most people that benefited are not farmers,” he said.

Abdulmumin Isa, CBN’s director of the corporate communications department, said that the apex bank had released N1.08 trillion as of February, out of which N960 billion was due for repayment.

Mr Isa said that ABP had supported about 4.57 million smallholder farmers who cultivated more than 6.02 million hectares of 21 commodities across the country.

The ABP guidelines stipulate that upon harvest, benefiting farmers are to repay their loans with produce, which must cover the loan principal and interest, to an anchor, who pays the cash equivalent to the farmer’s account.

However, default payments have continued to trail the programme as more than 50 per cent of loans remain unpaid.

(NAN)