ABP loans: the CBN will seize the guarantees of defaulting farmers
The Central Bank of Nigeria has said that farmers who fail to repay loans collected under its Anchors borrower program will be denied access to a new facility and have their pledged collateral foreclosed.
The CBN’s development finance department said so in its revised ABP guidelines released on Friday.
He said: “Failure to reimburse the facility as it falls due will result in the suspension of access to the new facility until the existing facility is recovered; call on the personal guarantee of management; and seize any collateral pledged.
The CBN is committed to cracking down on beneficiaries guilty of embezzling funds.
According to the apex bank, the sanctions for such hijacking include blacklisting the association and its leaders for all CBN interventions; continued leadership by participating financial institutions; loan repayment by guarantors / cooperatives / raw materials and associations.
He said the anchor would stop participating in ABP and any other CBN intervention for failing to sell quality produce to farmers.
The CBN described an anchor as a duly registered entity with the capacity to take production / production at agreed prices.
The overall objective of ABP, according to the central bank, is to create economic links between small farmers and processors with a view to increasing agricultural production and ensuring food price stability.
He said the revised guidelines took into account the realities and current developments of the program, aimed at promoting best practices in its implementation.
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