Agricultural Grants and Loan in Nigeria… It is no longer news that agriculture is a lucrative business in Nigeria. It has also been identified as the largest labor employer in Nigeria.
Where to farm is no longer a problem for people interested in farming activities, a report has it that Nigeria has about 84 million hectares of arable land, of which only about 40% has been cultivated.
To add to that, the climatic conditions in the country is suitable for the growth lots of agricultural products, including groundnut, cassava, cocoa, rice, palm, cashew, etc.
Nowadays, youths are interested in becoming entrepreneurs and venture into the agriculture business but they seem to face challenges like not knowing the type of agricultural business to start and funds to start the business.
That is why the government of the 36 states in Nigeria has set up different schemes and programs to provide support in the form of grants and loans for the development of the agricultural sector and to encourage farmers and investors to welcome agriculture.
In this article, you will be provided with a list of some government grants and loans available for those interested in booming their agricultural businesses.
These are made available by the federal government to the public and it covers a range of agricultural practices including crop cultivation and livestock rearing. There are a lot of approach the government has provided for individuals and corporate bodies to access agricultural loans. Some of them include:
1. Central Bank of Nigeria (CBN) Agricultural Loan.
This loan project was set up by the federal government to provide low-interest loans to farmers in Nigeria. To achieve this, the Central Bank of Nigeria (CBN) has recently approved the disbursement of about 75billion naira as a loan to farmers and cooperative societies in the 36 states and the federal capital territory (FCT).
This loan can be accessed directly from the Bank of Agriculture.
2. Bank of Agriculture (BOA) Loans
The Bank of Agriculture of Nigeria is the major avenue the government has employed to give out loans and grant to the public. The bank is owned by the federal government, with the Central Bank of Nigeria and the Federal Ministry of Finance incorporated as shareholders.
The activities of the bank are supervised by the Federal Ministry of Agriculture and rural development. When thinking of government loans, the BOA should be your first choice.
Requirements for Accessing Bank of Agriculture (BOA) Loans
1. You must have maintained a minimum customer account relationship of about six months
2. You must have deposited at least 20% of the required loan amount into the account
3. You must provide collateral, excluding land.
4. You must provide a detailed business plan.
However, the requirements for acquiring the loan are negotiable and may depend largely on the feasibility of your agricultural venture. Further details about the BOA loans are available on the BOA website.
3. Commercial Bank Loans
The federal government through the bank of agriculture and the bank of industries have partnered with different commercial banks to help farmers with the acquisition of loans. There are a variety of loan facilities that you could apply for from commercial banks, these include; short-term loans, medium-term loans, and long-term loans.
Some of the commercial banks you can approach to access loans are; Union Bank, First Bank, Zenith Bank, UBA, and Stanbic IBTC.
Requirements for Accessing Loans from Commercial Banks
The general requirement for all the commercial banks includes:
1. Open an account with the bank
2. Submit a loan application
3. Deposit at least 10% of the total money you applied for.
4. Provide the bank with collateral
5. Provide a detailed business plan with a complete feasibility study.
To get more information about available government loans from commercial banks, you could visit any of the bank branches in your locality for more details.
4. Agricultural Co-operative Societies
The easiest and surest means of securing agricultural loans is through cooperative societies. Credits given to these societies come as grants. Generally, the banks provide the grants to the cooperative societies who then distribute it to each member on the basis of contributory payments.
Some of the most notable agricultural cooperatives that you can join to access loans are; all farmers association of Nigeria (AFAN), youth empowerment in agricultural program (YEAP), and FADAMA.
Requirements for Accessing Co-operative Society loans
Accessing government loans and grants from banks by cooperative societies are relatively simpler – the basic requirements include:
1. Form a cooperative society
2. Submit a loan application writing with the cooperative letterhead to the bank. The application should be signed by the cooperative’s representative.
3. Submit a detailed feasibility study on the business.
The federal government is paying increasing attention to the agricultural sector by making loans and grants available. Many smart farmers have taken advantage of this opportunity; they are currently enjoying the benefits. You can get started today and increase your wealth.
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