Anchor Borrowers Programme

The ABP was established on November 17, 2015 to facilitate a demand driven ecosystem that creates economic linkages for all nodes of the commodity value chain, from inputs supply, through production, to processing, and finally, to the market.


The Objectives of the ABP include to:

  • Create an Ecosystem to link out-growers (Small Holder Farmers) to local processors
  • Increase banks’ financing to the agricultural sector
  • Increase capacity utilization of agricultural anchor companies involved in production of the identified commodities and the productivity/incomes of out-growers/farmers
  • Build capacity of banks, farmers and agricultural entrepreneurs through training programmes
  • Reduce commodity importation and conserve external reserves
  • Reduce the level of poverty among small holder farmers
  • Create jobs
  • Assist rural small-holder farmers to grow from subsistence to commercial production levels
  • Facilitate the emergence of a new generation of farmers/entrepreneurs

    • HOW TO APPLY

    • Small holder farmers are expected to come together under the umbrella of an Anchor.
    • The Anchor (large scale processor/producer, Commodity Association or the State Government) shall link the farmers to the Participating Financial Institution (PFI).
    • The PFI shall apply for funds to the CBN upon completion of due diligence on farmers and anchors.

    Eligibility

    Private Sector-led window Public Sector-led window
    • Prime Anchor
      • Must Partner with a PFI
      • Provide 70% collateral or 30% cash
      • Show technical and financial capacity to execute the project;
    • Commodity Association
      • Partner with PFI
      • Provide collateral, equity contribution and Personal Guarantee
      • Shoulder responsibility for repayment
    • State Government
      • Must Partner with a PFI
      • Provide 100% Irrevocable Standing Payment Order (ISPO)
      • Povide technical and training;

    Farmers’ Requirement:
    • Be a member of a Farmers’ Group, Commodity Association or be linked to an Anchor
    • Have a valid bank account with BVN
    • Not indebted under any CBN intervention
    • Not a member of multiple Commodity Associations
    Frequently Asked Questions (FAQs)
    • Can an individual farmer apply under the ABP? Yes, an individual farmer can apply under the ABP as a Prime Anchor. However, he should have a considerable size of land that will drive economies of scale.
    • What is the maximum loan size under the ABP? There is no maximum loan size under the ABP. The facility is a function of the validated land size and the approved Economics of Production (EoP), which is the cost of production per hectare for the commodity.
    • Which bank can serve as a Participating Financial Institution (PFI) under the ABP? All Deposit Money Banks (DMBs) and Microfinance Banks (MFBs) are eligible to participate as PFIs under the Programme.
    • What are the commodities supported under the ABP? The Programme supports all commodities that are raw materials for agro-allied firms. The concept is such that there must be an anchor/off-taker that guarantees a market for the produce.
    • Who determines the prices of inputs used in the EoP for ABP loans? Input prices are determined during a town-hall meeting of farmers, input suppliers and other relevant stakeholders. The type of input, quality specification and price are all agreed and communicated to the CBN for ratification.
    • What is the collateral requirement for participation under the ABP? The collateral requirement is a function of the loan amount and the perceived risk associated with the project. These vary from one PFI to another based on their risk appetite and risk acceptance criteria.