PREAMBLE
The Lagos State Ministry of Agriculture and Food Systems in collaboration with the Central Bank of Nigeria offers the opportunity of farmers to partake in the Anchor Borrowers Programme in Lagos State.
The programme thrust of the ABP is provision of farm inputs in kind and cash (for farm labor) to Small Holder Farmers (SHF) to boost production of commodities, stabilize inputs supply to agroprocessors and address the country’s negative balance of payments on food. At harvest, the SHF supplies his/her produce to the Agro-processor (Anchor) who pays the cash equivalent to the farmer’s account
Central Bank of Nigeria (CBN) is to provide finance through the Micro Small and Micro Enterprise Development Fund at 9.0 per cent interest rate and Coordinate the entire programme and serve as secretariat
Nigeria Incentive-based Risk Sharing for Agricultural Lending (NIRSAL) shall provide technical assistance to farmers, extension workers and banks and organize farmers into groups/cooperatives
Nigerian Agricultural Insurance Corporation (NAIC) is to provide insurance cover to the projects under the programme
Participatory Financial Institution (PFI is to provide financing through the CBN MSMEDF at an all inclusive interest rate of 9.0 per cent per annum; directly to the individual farmer’s account; Ensure that all payments due to suppliers are made on behalf of the farmers.
LASG is to identify, organize and provide technical support to the farmers. To also coordinate the process in conjunction with the CBN
PRE IMPLEMENTATION PROCESS
STAGE 1
- Schedule initial meetings for general information sharing with about ABP with Interest from Anchor stakeholders
- Determination of the Economics of production/ baseline offtake price (CALCULATOR)
- Identification of Anchor by Farmers
- Provision of Letter of Expression of Interest from Anchor firms, PFIs to CBN
- Identification and verification of targeted beneficiaries
- Grouping of farmers into cooperatives linked to anchor companies;
- A meeting at the instance of the CBN with the prospective anchor firms with the LASG representatives in attendance
If at least a prospective anchor firm meets all the conditions as stated in the guideline; the process commences
If none of the intending anchor firm can meet the conditions as stated in the guideline, additional work needs to be done by the stakeholders, if after the additional work no anchor firm still meets the conditions, then terminate the process
STAGE 2
- If an anchor has been identified, a Town Hall meetings will be arranged: In attendance are Anchor Input suppliers, Participating Financial Institutions, NAIC & Farmers (MSMEDF Office)
- Review of MOU
- Finalize Small Holder Farmers groups/coops/cluster •Registration of the cooperatives •Selection of Participating Financial Institutions/Input • Coordinate Harvesting & Supplier
- Execute MOU
- Financial Institution
- Anchor Firm
- Farmers Cooperatives
- Set Up Project Management Team; MSMEDF (Chair) DFOs, Anchor, Banks, Farmers’ Rep, State Govt Rep
- Training of Farmers by State Govt and Anchor
- Confirm adequacy of documentation/Verification of farm holdings
- Opening of Account with PFI
- Formal Submission of Bank Application (loan application by PFI to CBN)
- If Documentation is incomplete additional work needs to be done by the stakeholders, if after the additional work Documentation remains incomplete, then terminate the process
- If Documentation is complete: Implementation begins
- Process for Management Approval MSMEDF Office (CBN)
- If approved; Loan Disbursements MSMEDF Office (CBN) to PFI
- Input Supply/Cash Disbursement DFOs/PMT
- Commencement of Agronomic Practices DFOs/PMT/ Extension Agents
- Monitoring: MSMEDF Office/ Extension Agents DFOs/PMT
- Offtake of Produce by Anchor DFOs/PMT
- Anchor pays Farmers through the Banks DFOs/PMT
- END PROCESS Full Repayment DFOs/PMT
