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GTBank, Zenith Bank, Access Bank and many other commercial banks in Nigeria will start offering specialised loans to youths interested or operating agricultural business. The Agric loan comes with it own requirements and business-type.
In a statement seen by AllNews, applicants can obtain maximum of NGN2 billion from funds earmarked by the Central Bank of Nigeria (CBN) for the new Agric credit. The fund was provided through the Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS).
"The @cenbank has authorised commercial banks to give up to N2 billion maximum loan to youths interested in going into agriculture, under the Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS)." The Federal Government shared in a tweet.
According to the CBN, with the utilisation of P-AADS, there will be increase in private sector agricultural production of staple foods and industrial raw materials, as well as support food security, job creation and economic diversification.
In a CBN document obtained by AllNews, it was gathered that individuals interested in the loan must be involved in specific agric business such as; Rice, Maize, Cassava, Cotton, Wheat, Tomato, Poultry, Fish, Sorghum, Oil Palm, Cocoa, Livestock/Dairy, Any other commodities as may be listed by the CBN from time to time.
i. Agro-processors of agricultural commodities engaged in backward integration;
ii. Prime anchors and commodity associations participating under the Anchor Borrowers’ Programme (ABP) with evidence of contiguous land readily available for clearing and cultivation of agricultural commodities; and
iii. Other companies and individuals with evidence of ownership of contiguous land readily available for clearing and cultivation of agricultural commodities.
Interest rate under the intervention shall be 5.0% p.a. (all inclusive) up to 28th February 2021.
Interest on the facility from 1st March 2021 shall be 9% p.a. (all inclusive).
Annual crops: Maximum tenor of six (6) years with six (6) months moratorium.
Perennial crops: Maximum tenor of ten (10) years with one-year moratorium.
The collateral to be pledged by participants under the Scheme shall be title of the cleared
land and other acceptable collateral prescribed under the ABP.
CBN shall bear 50% of the credit risk in the event of default by the participant.
Repayment of the facility shall be made on instalment basis through the participating banks and spread over the EOP of the cultivated commodities.
The participating banks shall remit repayments received to the CBN on quarterly or annual basis depending on the commodity financed.
Prospective P-AADS participants must:
i. be existing or new firms engaged in agricultural production with proven capacity and bankable proposal
ii. possess acceptable title for contiguous lands of not less than 20 hectares;
iii. have good credit record
iv. be able to provide the required collateral for participation and
v. Provide evidence of capacity to cultivate a focal commodity directly or engagement of farmers, including youths as in-growers or out-growers to cultivate on the land after clearing.
Toni Tones 75.00 %
Osas Ighodaro 25.00 %