The ongoing dispute between one of Nigeria's top lenders Guaranty Trust Bank (GTBank) and notable agritech startup AFEX, culminating in a Court recently giving the nod for the seizure of AFEX's assets, is drawing attention to the complexities of Nigerias agricultural financing landscape.
Nearly a week after Justice Chukwujekwu Aneke of the Federal High Court in Lagos authorised Guaranty Trust Bank to temporarily take over the funds and assets of AFEX following an unresolved NGN 17.8 B (USD 11.7 M at current rates) debt, uncertainty looms over what this could mean for the upstart.
At the core of this matter lies the fallout from the Central Bank of Nigerias (CBN) controversial Anchor Borrowers Programme (ABP), designed to empower smallholder farmers and fortify the nations food security.
Launched in 2015, the ABP aimed to bridge the gap between farmers and anchor institutions, like AFEX, providing farmers with inputs and financing to bolster production.
The APB guidelines stipulate that upon harvest, benefiting farmers are to repay their loans with produce (which must cover the loan principal and interest) to an Anchor, which pays the cash equivalent to the farmer's account. However, the failure of the programme to live up to expectations has led to various consequences.
Operation Feed Nigeria
