20.2 C
Nigeria
July 25, 2024
AgroNigeria
News

Re-evaluate Risk Distribution in Anchor Borrowers Program, Expert Tells CBN 

Mr. Bolaji Akinboro, Chairman of Voriancorelli, has urged the Central Bank of Nigeria (CBN) to revisit the risk-distribution framework of the Anchor Borrowers Program (ABP) to ensure its effectiveness and address the issue of uneven risk and reward distribution along the agricultural value chain.

In an exclusive interview with AgroNigeria, he noted that the Anchors Borrowers Program, introduced by the Apex bank, has been hailed as a significant intervention in the agricultural sector. But believes that the program’s shortcomings have created opportunities for arbitrage due to the unequal distribution of risks and rewards.

Speaking further, Mr. Akinboro emphasized the need to place the farmers at the center of the ABP, suggesting that the Ministry of Agriculture and Food Security should take a more prominent role in agricultural transformation, with access to accurate data from entities like the National Identity Management Commission (NIMC) and Bank Verification Numbers (BVN).

He said, “The ABP was a commendable concept, but its fundamental weakness lies in the absence of technology programs in agriculture. Farmers lacked the means to independently confirm whether they received the services for which they obtained loans, leading to significant room for abuse.

“The problem of the ABP is risk-distribution. When risks and rewards are not properly distributed within a value chain, you create room for arbitrage. That is what has happened. The main reform that needs to happen is to return the farmer to the center of the value chain.”

Mr Akinboro added that forensic accounting needs to be done within the bank to determine the exact number of people owing within the program and the monitoring companies meant to supervise the execution of the program should be able to provide accurate data on those owing within the program.

“I think the government should go back and confirm whether those who are on the books as owing actually received any service. 

“In my understanding, there were monitoring companies who supervised the process up to the point of harvest implying that there should be no default. In my view the monitoring companies should be the source of truth regarding who is owing & who is not because they were the source of truth on service delivery.”

Related posts

How to Make Good Compost Manure

AgroNigeria

Community Demands Return of Agric College Relocated Over Insecurity in Yobe

AgroNigeria

Palliatives: Kwara Commences Distribution of 250,000 Bags of Rice

AgroNigeria