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Tuesday, 24 November 2015

How To Secure Agricultural Business Loan In Nigeria

Loan been Given To one of My Students In kwara State
Hello guys, am here today to write about how to secure agricultural business loan In Nigeria and take your agric business to the next level. Personally, this is one of the things that helped me in my business... Presently Agricultural development has been a matter of serious concern to the Nigerian government. The need to augment the country's domestic products through agriculture thus cannot be overemphasized. Many countries in the world have developed their economy to enviable degrees cultivating lands and monetizing the products. Which puts a challenge to Nigeria year after year to move a little concentration from crude oil to agriculture.

The agricultural sector is noted as the highest employer of labor in West Africa, yet, it is not much more than peasant farming which could barely satisfy the needs of families. These reasons and more have propelled the Federal Government of Nigeria to start agricultural grants and credit initiatives. Through the Bank of Agriculture and some other commercial Banks, the Central Bank of Nigeria (CBN) has mapped out N200 billion for
agricultural interest.

These grants are suppose to cover many of aspects of farming:

Poultry: One of the most lucrative businesses anyone could think of establishing, but it does not come easy. The process involves a huge capital which is the reason why it is in the list of farming that could be considered for Bank grants.

Pig farming: On the other side of meats is pork emanating from pigs. Described as the better option, but the opportunity to setup a pig farm does not come cheap. So, it stands to be considered for loans.

Cassava: Serving as one of the most versatile farm products, cassava has been in the hem of agricultural products to be developed for extensive use in Nigeria. Biscuits, Bread, etc. It's among the big products that the Federal Governments is urging investors to develop. And that means, your cassava farm proposal will be considered for loan.

Rice: Undoubtedly the most imported and consumed food in Nigeria that leaves the question: When will Nigeria cultivate enough to stop depending on other countries for rice sustenance? The need to develop Nigeria's rice farm culture is obvious and welcomed. It is among the farm products legible for loan.

Palm tree: Before 1934, Nigeria was the highest exporter of palm nuts, a product of palm tree. Today, Nigeria is making about 18% of palm products exportation. The chance to get back to where she used to be depends on the cultivating efforts of palm tree farmers. Nigerian government has been promising anyone who has interest in developing a palm tree farm loan.

There are so many other farm opportunities to be reckoned with. Whichever one you choose, follow the steps below to get the fund you need to cultivate it.

Bank of Agriculture

The Bank of Agriculture (BOA) was established to help farmers develop their fields to any extent possible by giving low interest loans to qualified applicants.

The process of borrowing from BOA is not rigid. BOA operates at a level of direct lending, on lending, collaboration, and credit monitoring.
Requirements for loans -
Loan Rate: Microcredit Agric and collaboration- 12%.

Loan condition: Lien deposits- 20%.

Customer account relationship- 6 months.

Deposit Rate: Interest Rate 2%.

A lot of other things are negotiable, but remember; your loan credibility depends much on the evidence that you have what it takes to execute your agricultural proposal. You can reach BOA on 07042262222, 07040202222.

Agric loan is not exclusive to BOA, other commercial Banks have been partnering with the FG to assist Farmers. For instance-

Union Bank

This Bank offers Agricultural financing to Agro-businesses, from small  to big. But the starting point is: Evidence of ownership or right to use whatever portion of land you plan to use. Then you can choose from their Loan facilities what you really want-

Short Term Loan: Which covers a short period of time, say- 1 or 2 years.

Medium Term Loan: This type of Loan exceeds the period of 1 to 2 years. Sometimes, it lasts up to 4 years due to the technicalities involved in the business it is being funded with.

Long Term Loan: This type of loan is for Agric products that take longer time to mature.

Fixed Capital: Farmers get this type of Loan to enable them establish fixed assets on their farms.

Working capital Facility: This Loan is given to enable Farmers shoulder their day to responsibility in the farm.

Whatever your objective is, these facilities will enable you to achieve it, so far you meet up with these requirements-

  •     Open an account with Union Bank
  •     Submit a Loan application to the branch's Business Development Manager
  •     Pay 10% of the total fund you applied for
  •     State the purpose of the Loan
  •     Method of your farm production
  •     Yields as expected
  •     Your repayment plan

This setting is exclusive to individuals only. For Limited Liability companies and corporate organizations, there are only 2 steps-

Submit a loan application written with the company's letter head to the Branch. It must be duly signed by the company's representatives.

Submit detailed report on feasibility studies

There are other banks that offer credit facilities for farming in Nigeria, UBA, First Bank, Stanbic IBTC etc. Feel free to walk into any of the Banks and inquire of their procedure

Pls Note: To get loan from either BOA or Banks giving out loans for agricultural purposes is simple and that is the procedure up-there but it is not an easy task in the sense that before you will be given the loan, their are some steps you will have taken which are

1. You need to write and produce a good and convicing Business plan
2. You need to be confidence and already know all you need to know about any of the Agricultural business you are doing.
3. Also note that, the loan will attract interest but be rest assured that it worth it and you will really make a lot from it.

If you have these 3 things, you will surely be given the loan....

What Next...

If you will be going in for Poultry Farming, You need addition resources to make your poultry business a successful one. 

Join other poultry farmers who have made our Poultry Farming eBook their companion towards starting their poultry farms and managing it effectively.  

You aren't yet serious in your poultry business until you get this eBook. And the best part is that it contains complete Poultry Business Plan. Click Here to buy the poultry farming eBook
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  1. Keep the good work up kenny... Thank you for the info.

  2. Hello sir, can i get your contact, I really need to learn from you how to get the loan. Am ready to pay for tutorial... Please give me your whatz app contact if on whatz app.... Thank you

  3. very useful information thanks for sharing a valuable notes.


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