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N75bn Anchor Borrowers Fund Sits In GTB And May Not Be Lent To Farmers - Business - Nairaland

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N75bn Anchor Borrowers Fund Sits In GTB And May Not Be Lent To Farmers by Shehuyinka: 3:46pm On Oct 04, 2023
AS farmers seek cheap funds to produce food for Nigerians, over N75 billion of the Central Bank of Nigeria (CBN)’s Anchor Borrowers Fund (ABF) is sitting in the tills of Guaranty Trust Holding Company PLC (GTCO), also known as Guaranty Trust Bank (GTB), Economy Post can authoritatively report.

According to the second quarter 2023 financial statements released to the Nigerian Exchange Limited, the Tier-1 bank has N75.359 billion of the Anchor Borrowers Fund sitting in its coffers, which has not been lent to farmers.

Based on the details on the financial statements, GTB had N78.424 billion ABF in December 2022 but lent out only 3.065 billion in six months to June 2023, leaving a balance of N75.359 billion.

Questions are being asked as to why GTB lent out only N3.065 billion to farmers in six months when players in the agric value chain complain that funding is among their biggest challenges.

Nigeria’s central bank started the Anchor Borrowers’ Programme (ABP) during the tenure of the immediate past President, Mr Muhammadu Buhari, with a view to creating economic linkages between smallholder farmers and reputable companies involved in the production and processing of key agricultural commodities.

The fund for the project is domiciled in deposit money banks for onward lending to farmers. However, several farmers have complained that they cannot obtain the fund owing to the reluctance by banks to lend as exemplified by stringent conditions attached to its access.

According to the CBN, the tenor of the facility depends on the gestation period of the targeted commodity, though it must not exceed two years. The facility is disbursed at an interest rate of 9 percent. Deposit money banks say that the loan was repriced from a maximum rate of 9 percent to 5 percent due to forbearance.

GTB’s Pattern of lending

In 2020, GTB got N2.997 billion of the ABP’s war chest from the CBN. The fund rose to N66.827 billion in 2021 and further to N78.424 billion in 2022. However, it fell to N75.359 billion by June 2023, meaning that this was the only time the money was lent to farmers between December 2020 and June 2023.

Real Sector, MSME funds also in the bank

Apart from the ABF, the bank also has the Real Sector Support Fund (RSSF) valued at N12.705 billion in its tills. The fund stood at N15.471 billion in December 2022 but fell to N12.705 billion in June 2023. This implies that only N2.766 billion was lent to manufacturers and players in the productive sector in six months.

In December 2018, the RSSF stood at N25.292 billion, meaning that N12.587 billion of the fund was disbursed to manufacturers in four and a half years. There are other funds sitting in the bank, including the Excess Crude Account and the MSME Development Fund.

Funds may not be lent out

Due to several abuses of the CBN Act by the now ousted Governor Godwin Emefiele, the new helmsman at the apex bank, Mr Yemi Cardoso, has announced that all intervention programmes have been suspended.

During his screening at the Senate on September 27, 2023, Cardoso had said the CBN would no longer continue with its intervention programmes.

“Much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred. In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth,” he said.

This means the over N75 billion ABF and N12 billion RSSF sitting in GTB may be returned to the CBN after the conclusion of work by a special investigator appointed by President Bola Tinubu to examine the apex bank’s books, Mr Jim Obazee.

READ MORE HERE: https://www.economypost.ng/featured/n75bn-anchor-borrowers-fund-sits-in-gtb-and-may-not-be-lent-to-farmers/2023/10/03/

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