Anchor Borrowers’ Programme (ABP) for SMEs in Nigeria

Title: A Guide to the Anchor Borrowers’ Programme (ABP) for SMEs in Nigeria The agricultural sector is a vital part of the Nigerian economy, providing employment opportunities for millions of people and contributing significantly to the country’s GDP. However, small and medium-sized enterprises (SMEs) in the agricultural sector often struggle to access financing, which can hinder their growth and development. To address this issue, the Central Bank of Nigeria (CBN) established the Anchor Borrowers’ Programme (ABP), which provides loans to eligible SMEs in the agricultural sector. In this article, we’ll provide an overview of the ABP and how you can apply for the loan. The Central Bank of Nigeria (CBN), in line with its developmental functions as enshrined in Section 31 of the CBN Act 2007, established the Anchor Borrowers’ Programme (ABP) to create economic linkages between smallholder farmers (SHFs) and reputable companies (anchors) involved in the production and processing of key agricultural commodities. The core of the Programme is to provide loans (in kind and cash) to smallholder farmers to boost agricultural production, create jobs, reduce food import bill towards conservation of foreign reserve.

What is the ABP?

The ABP is a loan scheme established by the CBN in 2015 to provide financing to SMEs in the agricultural sector. The fund aims to enhance agricultural production and processing, reduce the cost of credit to agricultural producers, and promote job creation and economic growth. The loan can be used for a range of purposes, including crop production, livestock farming, fisheries, and agro-processing. The interest rate is set at 9% per annum, and the repayment period is up to five years.

Objectives of ABP

The broad objective of the ABP is to create economic linkages between smallholder farmers and processors with a view to increasing agricultural output and ensuring food price stability. The specific objectives include: I. Increase banks’ financing to improve agricultural productivity by creating an ecosystem that drives value chain financing; II. Reduce the nation’s food import bill through import substitution and enhanced domestic value addition; III. Create new generation of farmers through innovative financing to support smart agriculture; and IV. Deepen financial inclusion and grow smallholder farmers from subsistence to commercial farming.

Who is eligible for the ABP loan?

To be eligible for the ABP loan, your business must meet the following criteria:

1. Be a registered business in Nigeria.
2. Have a valid Bank Verification Number (BVN).
3. Have a satisfactory credit report.
4. Have a viable business plan.
5. Be engaged in agricultural production, processing, or marketing.
6. Be a farmer or a cooperative society.
7. provide 10 per cent minimum equity contribution

How to apply for the ABP loan

To apply for the ABP loan, follow these steps:

1. Visit the CBN website or the website of any of the participating financial institutions.
2. Download and complete the application form.
3. Submit the completed application form and all required documents to the nearest participating financial institution.
4. Await feedback from the financial institution on the status of your application.

Required documents for the ABP loan application

When applying for the ABP loan, you’ll need to provide the following documents:

1. Completed application form.
2. Business plan.
3. Bank statements for the past six months.
4. Tax clearance certificate.
5. Certificate of incorporation.
6. Memorandum and Articles of Association.
7. Evidence of collateral, such as landed property or a personal guarantee.
8. Evidence of agricultural activities, such as land ownership or a tractor registration certificate.

Conclusion

Access to finance is critical for SMEs in the agricultural sector to grow and contribute to the Nigerian economy. The ABP loan scheme is an excellent opportunity for eligible SMEs to access low-interest loans that can help them expand their agricultural businesses. If you’re an eligible SME, follow the steps outlined in this article to apply for the loan and take your agricultural business to the next level. For more information and to apply for the ABP loan, visit the CBN website or the website of any of the participating financial institutions.