CBN unveils plan to disburse N432b non-interest loans to over one million farmers

CBN unveils plan to disburse N432b non-interest loans to over one million farmers

- The CBN has disclosed its plans to support Nigerian farmers with N432 billion non-interest loans

- Over 1.1 million farmers, cultivating over one million hectares of farmland, were expected to benefit from the loans

- The CBN's aggressive funding of the agricultural sector is part of the bank's plans to ensure Nigeria does not slide back into recession as a result of the coronavirus pandemic

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The Central Bank of Nigeria (CBN) is reportedly set to disburse N432 billion non-interest loans to farmers across the country.

The Nation reports that the apex bank will soon release the framework for the disbursement of the loan which will not attract any interest.

This was disclosed by CBN’s director of corporate communications, Isaac Okorafor and director, Development Finance Department, Yila Yusuf, who jointly represented the CBN Governor, Godwin Emefiele, at a stakeholders’ meeting to review the strategies for the 2020 agricultural wet season.

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CBN unveils plan to disburse N432b non-interest loans to over one million farmers

CBN unveils plan to disburse N432b non-interest loans to over one million farmers. Photo credit: Buhari Sallau
Source: Twitter

Legit.ng gathers that the move is geared towards boosting Nigeria's agricultural development agenda.

According to Okorafor, the loans will be channelled through Anchor Borrowers’ Programme and Targeted Credit Facility to support households and others affected by the COVID-19 pandemic.

The bank also disclosed plans to fund value chains of nine commodities to the tune of N432 billion in the 2020 wet season.

Some of the commodities to be funded are rice, maize, livestock, fish, oil palm, cowpea and poultry among others.

The CBN's aggressive funding of the agricultural sector is part of the bank's plans to ensure Nigeria does not slide back into recession as a result of the coronavirus pandemic.

Also speaking, Yusuf said over one million farmers are expected to benefit from the loans that will help to produce a collective output of 8.3 million metric tons.

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Also in a bid to avert the looming economic recession as a result of the coronavirus pandemic, the CBN has cut its key interest rate to 12.5% from 13.5%.

The new rate is the lowest in four years, citing CBN's governor Godwin Emefiele as saying that seven of the 10 members of the monetary policy committee voted for the cut.

Legit.ng gathers that the cut may have two effects; one, it may further stoke inflation and increase pressure on the naira; two, it could also help boost the economy which is facing pressure from the oil price crash and the coronavirus pandemic.

Meanwhile, Daily Trust also reports that the CBN has reduced interest rates on its facilities through participating Other Financial Institutions (OFIs) from 9% to 5% per annum for one year effective March 1, 2020.

The directive was reportedly contained in a circular issued by the apex bank on Wednesday, May 27.

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The circular also announced that CBN intervention facilities obtained through participating OFIs – Microfinance Banks (MFBs), Primary Mortgage Banks, and Institutions, among others – will be given a further one-year moratorium on all principal repayments, also effective March 1, 2020.

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