Bank of Nigeria has said farmers who fail to repay the loans collected under its Anchors Borrowers Programme will be barred from accessing a new facility and have their pledged collateral foreclosed.
The Development Finance Department of the CBN said this in its revised ABP Guidelines released on Friday.
It said, “Failure to repay facility as and when due would attract suspension from accessing new facility until the existing facility is recovered; call-in the personal guarantee of the leadership; and foreclose on all pledged collateral.”
The CBN vowed to get tough on beneficiaries guilty of diverting the funds.
According to the apex bank, punishment for such diversion include blacklisting of the association and its leadership from all CBN interventions; prosecution of the leadership by the participating financial institutions; repayment of the loan by the guarantors/cooperatives/commodity and associations.
It said the anchor would cease to participate in the ABP and any other CBN interventions for failure to offtake quality produce from farmers.
The CBN described an anchor as a duly registered entity with the capacity to offtake produce/output at agreed prices.
The broad objective of the ABP, according to the central bank, is to create economic linkages between smallholder farmers and processors with a view to increasing agricultural output and ensuring food price stability.
It said the revised guidelines addressed current realities and developments in the programme, aimed at promoting best practices in its implementation.
Source PUNCH.
