Agricultural loans are the type of loans that are meant for different kinds of agricultural purposes. Through this channel, farmers are meant to make applications for these loans in order to be able to get supplies for their farm. With this acquired loan it will be easier for the Farmer to get seeds, equipment, machinery, and pay laborers.
These agricultural loans are meant for types of farming which include aquaculture, animal husbandry, floriculture, horticulture, and sericulture businesses.
Some other expenses that could be settled using this loan include irrigation systems especially in the North and purchase of biogas plants.
The Apex bank in Nigeria which is Central Bank of Nigeria made a partnership deal with the bank of agriculture in 2016 where they placed N200 billion to help finance agricultural activities in Nigeria.
Due to the mono economic nature of the Nigerian economy, we solely depend on crude oil Nigerian government is seeking to diversify its means of income and revenue.
That is the major reason why it is making agriculture in Nigeria of utmost importance. other countries in different parts of the world have capitalized on agriculture and Nigeria which is much better than them is slacking and this speaks badly of the government.
The agricultural sector in Africa is said to be the highest employer of labor in west Africa as most of the biggest farms are found on the continent.
The kind of farming being illustrated here is not peasant farming but commercial farming which would feed the nation, not an individual. Nigeria we don’t have to import agricultural products when the country has fertile lands and capable hands, instead the country is meant to export products and Gain revenues from it. I bet this is why the government is not taking it lightly and set aside funds to empower Nigerian farmers to do better.
There are lots of agricultural grants and credit initiatives in Nigeria and this is made available through commercial banks and banks of agriculture.
However, before you know what you’re going for it is very important to understand the concept of the agricultural loan.
Agriculture is very crucial and is one of the primary sources of livelihood for most people in Nigeria especially the northern region.
Nigeria which has fertile ground has the potential to become one of the best in the whole world but credit is the factor that limits most agricultural farmers in both rural and urban areas.
When there is a proper provision of Base capital it will lead to revenue generation and technological upgrade in the agricultural sector.
Over time the supply of financial services to the agricultural sector has been very low which is why agricultural loans have been introduced by the Federal government to aid in more production.
Kinds of Farming That Obtains Agric Loans in Nigeria
Below listed at the types of farming with which he could easily get agricultural loans with:
It is one of the most common and lucrative types of agriculture and with this, you can easily get agricultural loans.
This poultry business is not very easy to start up especially if you’re looking at large quantities of livestock. It also requires the cost of capital and that is why the provision for the agricultural loans has been made for it.
Another kind of agriculture which attracts agricultural loans easily is pig farming. The demand for pork meat is very high due to its sweetness and while it is a very lucrative business, having the capital to set it up is very high.
This is one of the most common and widely used crops in the whole of Nigeria. reason being that cassava is an agricultural product with a wide range of usage. Cassava is being used to develop and produce bread and biscuits. This product is considered as one of the best in a bid to secure the agricultural loan.
it is a fact that cannot be disputed that rice is one of the most consumed food in Nigeria and not just that it is the most imported farm produce. During the current administration of President Muhammadu Buhari he had banned the importation of rice and encouraged the production of rice from local companies. This has given the Farmer a small job and increase the source of income.
Rice farming is reputable and is considered eligible for agricultural loans.
Back in 1934 for Nigeria what’s the highest exporter of palm products but currently it has fallen to the extent that Nigeria only makes 18% of palm products exportation.
How to get Agricultural Loans
You could easily get your agricultural loans using these platforms:
- Bank of Agriculture
The bank of agriculture was set up with the purpose of helping farmers develop their farm by giving them loans with low interest.
Getting an agricultural loan from the bank of agriculture is not difficult as it operates direct lending, collaboration, and also does credit monitoring.
Requirements for Loan
Loan Rate: Microcredit Agric and collaboration- 12%.
Loan condition: Lien deposits- 20%.
Customer account relationship: 6 months.
Deposit Rate: Interest Rate 2%.
The other additional things which can be negotiated but one crucial thing is that the credibility of your loan assessment depends solely on the project you have and the evidence you present to them regarding your agricultural proposal.
the bank of agriculture is not the only bank giving out agricultural loans or other commercial banks in Nigeria partners with the Federal government to help develop agriculture in Nigeria.
The other commercial banks that assist the federal government in disbursing agricultural loans to these farmers are:
- First Bank
- Stanbic IBTC
- Access bank
- Bank of Agriculture
For Union bank, there are some required information in order to get the loan easily;
- Open a Union Bank account
- make submission of Loan application to the branch’s Business Development Manager
- Pay 10% of the total fund applied for
- Fill in the purpose of the Loan
- Type of your farm production
- Yields as expected
- Your repayment plan
Good luck as you get loans for your agricultural business.