How to Access CBN Non-Interest Accelerated Agricultural Development Scheme (AADS Loan)

In furtherance of its pivotal role in providing funding to assist the critical sector of the Nigerian economy, the Central Bank of Nigeria (CBN) has introduced a Non-Interest Accelerated Agricultural Development Scheme (AADS Loan) for the youths.

The only official website to apply is https://cbn.gov.ng/cbncpp-loanapp

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The objective of the Accelerated Agricultural Development Scheme (AADS) scheme according to CBN is to engage a minimum of 370,000 youths in agricultural production across the country over the next three years in order to reduce unemployment among the youths in the country and increase agricultural production towards food security, job creation, and economic diversification.

CBN AADS Loan Eligibility.

• i. Beneficiary must be a Nigerian youth with the ages of 18 to 35 years
• ii. Sign an undertaking to abide by the terms of agreement of the Scheme

Focal Activities.

Two Agricultural Commodities where the state has comparative advantage

How the CBN CBN Non-Interest Accelerated Agricultural Development Scheme Works

Mobilization and Clustering

1. State government to mobilize prospective young farmers with representation from all Senatorial Zones
2. State Governments/FCT to provide agricultural land in contiguous locations in all senatorial Zones. Minimum of 100 hectares per cluster

iii. Prospective entrepreneurs (that meet the eligibility criteria) shall be grouped into clusters by commodity to be produced.

1. State government to allocate 2-5 hectares of land per beneficiary
2. State Government to provide access roads, water sources and other infrastructure that will enhance agricultural production on the land
3. States may charge a rental on land (Max. of N10,000 per ha) to defray the cost of land clearing and other infrastructure provided. Rental charged will be embedded in the Economics of Production (EoP) of the farmer.

Financing:

1. The PFIs will act as agents of the CBN in disbursing the financing to the beneficiaries, which shall be in kind.
2. The PFIs shall purchase the inputs for on-selling to the beneficiaries, using CBN approved non-interest financing contract of Murabaha, Istisna’, etc at an all-inclusive rate of return of 9% p.a. For the financing of labour, the PFI shall use Service Ijarah or any other appropriate CBN approved contract for NIFIs with the same all-inclusive rate of return of 9%.

iii. Financing tenor is 6 months for grains and broiler production (rice, maize, soy bean etc); 18 months for cassava; 24 months for egg production and ruminants; 5 years for plantation crops etc

1. Average financing size of N250,000 per ha for arable crops; N500,000 per unit for livestock; and N1.5 million naira for plantation crops like cocoa, cashew and oil palm.

Marketing:

• Anchors/Processors/Aggregators shall sign uptake agreement with PMT.
•  Produce off-take shall be on cash and carry basis.
• Contiguous nature of farms should reduce the logistics associated with aggregation.

Participating Financial Institution (PFI) shall:

• Conduct due diligence in account opening and credit appraisal.
• Access funds from the CBN on Wakala basis for on-financing to eligible entrepreneurs.
• Ensure that payments are made directly to vendors in respect of equipment to be acquired with the purchased facility and the PFI takes lien on such assets.
• Charge the entrepreneurs the exact rate of return as prescribed by the CBN.
• Monitor the beneficiaries to ensure full utilization of the facilities.
•  Register beneficiaries’ BVN on the National Collateral Registry (NCR).
• Monitor projects.

Input Suppliers/Service Providers shall:

• Ensure timely delivery of inputs/services
• Provide technical support on usage wherever it is required
• Replace deficient inputs supplied to beneficiaries within 5 working days of receiving such complaints by beneficiaries
• Provide effective customer services to feedback and complaints management

Anchors/Processors shall:

• Sign off-take agreement with the PMT
• Off-take produce at the prevailing market price or average of 3 prices within the State
• Make payment for all produce collected within 5 working days of collection
• Provide logistics for produce aggregation and evacuation
• Provide technical support for harvesting and handling of produce

Beneficiaries shall:

• Be responsible for the management of the farm
• provide third party guarantor for repayment of financing facility.
• Cross guarantee one another
• Must agree to work with extension workers
• Commit to abide by the terms of agreement and not to side sell produce
• Repay the financing facility as and when due by surrendering the output to the Anchor or State

Nigeria Agricultural Insurance Corporation (NAIC) shall: provide insurance cover for agricultural enterprises under the Accelerated Agricultural Development Scheme