The International Monetary Fund(IMF) has announced that only 24% of loans made under the Central Bank of Nigeria’s Anchor Borrower Program have been repaid.
This disclosure is made by the IMF’s Selected Issues paper on Nigeria and was prepared by his team of IMF staff as background material for their regular consultations with Nigeria.
This document has been determined to be based on information available at the time of completion on 12 January 2023.
Agricultural loans have not significantly boosted the country’s production. This is although there are challenges in targeting the right beneficiaries of the loans, according to the IMF.
It noted that;
“The weak effect of agricultural credit on production growth could be associated with difficulties in targeting the correct recipients.”
They also noted that although the CBN allows farmers to pay in kind or cash under the ABP. However, repayments have been very low.
The document read;
“For the Anchor Borrowing Programme, repayment is also low at 24%, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.
“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted and occasionally the funding is used for other purchases (e.g., new agricultural input trading companies to elicit trading rents).”