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CBN Unveils Guidelines for Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS)

P-AADS

The Central Bank of Nigeria (CBN), in line with its developmental mandate, has released a guideline for the Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS).

See Also: Jim Leech Mastercard Foundation Fellowship On Entrepreneurship 2021 For Young Africans

This is in line with its mandate to continue to develop and introduce development finance programs and schemes as a way to expand financial access to critical sectors and segments of the economy to achieve food self-sufficiency as well as diversification.

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Recall that CBN introduced the Accelerated Agriculture Development Scheme (AADS) to address the food security and youth unemployment challenges in Nigeria to engage 370,000 youth in agricultural production, in collaboration with state governments. Now, to complement AADS, P-AADS will explore private sector partnerships to facilitate more rapid land clearing for the production of key agricultural commodities.

According to the information; The broad objectives of P-AADS are “to facilitate increased private sector agricultural production of staple foods and industrial raw materials, as well as support food security, job creation, and economic diversification.”

See Also: Eligible/Ineligible Businesses That can Apply For The N75 Billion Nigeria Youth Investment Fund

Eligibility Criteria

To benefit from this initiative, you must;

  1. Be an existing or a new firm in agricultural production with proven capacity and bankable proposal
  2. You must possess the acceptable title for contiguous lands of not less than 20 hectares;
  3. Have a good credit record
  4. Be able to provide the required collateral for participation and
  5. You can provide evidence of the capacity to cultivate a local commodity directly or engagement of farmers. This includes youths as in-growers or out-growers to cultivate on the land after clearing

See Also: Lagos State Government Internship Program For Unemployed Graduates – Apply

Things To Note About P-AADS

As stated in the guideline, “Agricultural commodities eligible for consideration under the scheme include; rice, maize, cassava, cotton, wheat, tomato, poultry, fish, sorghum, oil palm, cocoa, livestock/diary. And any other commodities as may be listed by the Apex Bank from time to time.”

The funds shall come from the Anchor Borrowers’ Programme (ABP).  

The maximum loan accessible under the scheme shall be N2 billion per obligor. The facility shall be repaid from the Economics of Production (EOP) for cultivating on the cleared farmland

The 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 a one-year moratorium

The collateral to be pledged by participants under the Scheme shall be the 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.

The repayment of the facility shall be on an installment 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 a quarterly or annual basis depending on the commodity financed

See Also: 35 Booming business ideas you can start now with step-by-step guides to starting them.

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