How to get Agricultural loan in Nigeria

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If you are looking for Agricultural Loan in Nigeria, you are not alone, because thousands of people who are into agricultural production are looking for this loan too. The current economic situation in Nigeria has driven the country to take agriculture more seriously than ever before.

Taking the current economic situation in consideration, The Central Bank of Nigeria (CBN) has allocated about 200 billion Naira to fund the agricultural sector and this means that funding is available for every farmer or investor looking to expand or get into the sector.

The first problem farmers experience is not getting the loan but being informed on how to properly gain access to the agricultural loan. This has led to growing concerns in the country, with many farmers stipulating that they have no access to the agricultural loan facilities being disbursed.

The first thing you need to know is the type of agricultural businesses that have access to Agriculture loans. While some do, others don’t. Some of the agricultural products that can give you access to Agriculture loans in Nigeria are cassava farming, fish farming, poultry farming, cotton farming, oil palm farming, pig farming, maize farming, rice farming, snail farming, and a lot more.

The most popular means of getting Agriculture loan is through Bank of Agriculture (BOA) which is available in every state. Notwithstanding commercial banks do offer Agricultural loans too.

Some banks that are offering agricultural micro-loans for farmers in Nigeria are Union Bank, United Bank For Africa (UBA), Stanbic IBTC, First Bank, some other banks, and several micro-finance banks. These loan institutions will require that existing farmer present a financial statement showing their income statements so far. New farmers would need to present a viable business plan for the bodies to review.

 

Bank Of Agriculture:

As it same implies was established to provide agricultural loan to support all agricultural value chain activities and capacity development through the promotion of co-operatives, agricultural information systems, and the provision of technical support and extension services.

There are different ways to get a loan from the Bank of Agriculture, but the most popular way is;

Bank Of Agriculture Direct Credit Product

  • Developed to finance agricultural productions and Agro-allied activities.
  • Loan volume ranges from above N250,000.00 to a maximum of N50,000,000.00.
  • Limit of N5,000,000.00 to individual persons.
  • Above N5,000,000.00 to corporate organisations.
  • Loan tenor not exceeding 5 years.
  • Disbursement both cash and kind.
  • For both individuals and cooperate bodies.
  • Staggered disbursement.
  • Backed up with a viable, profitable and bankable business proposal.
  • Agro-business must be a clause in the memorandum of the company for corporate applicants.
  • Security acceptable to BOA requirement
  • Interest rate 14% for agricultural production and agro-processing while commodity marketing is 20%.
  • Current tax clearance certificate required.
  • Last 3 years audited statement of account or statement of affairs required.
  • Consent to the mortgage of the landed property being pledged as security for the loan required.

 

Bank Of Agriculture Large Credit Product

  • Developed to finance large agricultural production and Agro-allied activities.
  • Loan volume ranging from above 50 million to a maximum of 1 billion for a single obligor.
  • Accessed by corporate bodies only.
  • Loan tenor not exceeding 5 years
  • Disbursement both cash and kind.
  • Staggered disbursement.
  • Backed up with a viable, profitable and bankable business proposal.
  • Agro-business must be a clause in the memorandum of the company for corporate applicants.
  • A security acceptable to BOA requirement.
  • Interest rate 14% for agricultural production and agro-processing while marketing is 20%.
  • Current tax clearance certificate required.
  • Last 3 years audited statement of account or statement of affairs required.
  • Consent to a mortgage of the landed property being pledged as security for the loan required.

 

LAPO Microfinance Bank

Over the years, LAPO has become a household name. LAPO Microfinance Bank Agricultural Loan was established to finance the farming activities of individuals, group or corporate organisations. The repayment schedule is designed to suit the seasonal nature of such activities.

Features Documentation Required

  • Duly completed application form
  • 2 guarantors
  • 2 recent passport-size photographs
  • Current utility bill
  • A valid means of ID (national ID, driver’s license, voter’s card, international passport)

 

  • Facility range: N50,000 (minimum) to N500,000 (maximum)
  • Methodology: Individual, group and corporate
  • Duration: 1-12 months
  • Grace period: 30-60 days
  • Prospective clients must be practising farmers with verifiable evidence of existing farm investments.

 

Benefits:

  • No collateral
  • Provides capital for farming activities
  • Flexible repayment structure
  • Low-interest rates
  • Expert financial advice available

 

First Bank Agricultural loan:

This bank offers Agricultural loan through Micro Small and Medium Enterprises Development Fund, Commercial Agriculture Credit Scheme (CACS) and Real Sector Support Facility

Real Sector Support Facility:

Are you a start-up business or a large enterprise working on expansion? This special intervention fund of N300 billion established by the Federal Government through the Central Bank of Nigeria (CBN) is available to assist your business’s financing needs by providing low interest, long-tenured funds.

Micro Small and Medium Enterprises Development Fund:

If you own micro, small or medium agricultural enterprise, this loan facility is a special intervention fund provided by the CBN to support your business. You get this loan at a low-interest cost and enjoy long-tenured repayment structure; to assist your business in enhancing capacity for employment generation, growth and economic development.

Commercial Agriculture Credit Scheme (CACS)

As an agricultural business owner, you can be a beneficiary of the CACS N200 billion Fund. This facility was established by the CBN and Federal Ministry of Agriculture to fast track the development of the agricultural sector in Nigeria by giving loans support to businesses like yours.

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