Securing an Agricultural Loan

The bank of Agriculture was set up in 1974. it has its head office in Kaduna state and has over 200 branches all over the federation.

It has changed names over a period of time since inception, from being formerly the Nigerian Agricultural cooperative and rural development bank (NACRDB) to its present day name of bank of agriculture (BOA).

The main objective of the bank still remains the same. This being granting soft loans to farmers at favourable interest rates and over a period of time. Since the discovery of oil in the 1970’s before which agriculture was the mainstay of our economy, which we seemed to have neglected.

The government has seen the reason to go back to the period preceding the oil boom era, due to such factors as the current continuous sliding of oil price in the international market.

We need to go back to the agricultural sector, inject life into it by providing funds to already farmers, help in their expansion, make them more mechanized, provide funds for the agricultural value chain as well as encourage people who are interested to come into agriculture.

The current rate of unemployment in the country has also supported this notion for more of our people to go into this sector.

The national objective being ensuring food security for our population and increasing the contribution of the agricultural sector to the gross domestic product (GDP).

It’s pretty simple to get a facility from the bank of agriculture now, all you need do is walk into the nearest branch of the bank with the following:

(1) 4 passport photographs

(2) N2000 for individual account and N5000 for corporate account registration

(3) registration of business name in case of corporate.

There services come in 2 folds, they ate explained as follows;

– individual account: here a farmer or an individual walk into any branch and asks to register under the individual account.

The individual then registers with the passport photographs and the sum of N2000. features of this account includes you will only be able to access funds or get agricultural loans after 3 months of registration. The highest sum disbursable under this account is N250,000.

The beauty of this account is that moratorium for the credit is a maximum of 6 months, interest rate is just 12%, maximum repayment period is 24 months or 2 years as the case maybe. Personal guarantee by 2 people is also required as opposed to collateral or some other form of security.

This type of facility is good for farmers who want to start up on a small scale, already practising farmers who want to upgrade or add to their farm stock.

-The corporate account: here a registered company or a registered business name will be registered with the bank. Registration will be with the sum of N5000 and pictures as well as identity cards of the directors of the company. Interest rate also charged on this account is at 12% like the individual one, but this account has an advantage that you can get any amount you require for your venture.

There is no credit ceiling with this type of facility. However also, you need to have collateral security or some form of collateral for the amount you require.

A moratorium of up to 6 months is also available on this account with a maximum payment period that can be restructured to suit the lender.

I would like to state categorically that the bank of Agriculture still remains the best lender of funds to the agricultural sector. it is not that commercial banks or microfinance banks dont give out agricultural loan packages which will make anyone wonder why the need for a specialised institution like the BOA.

The major thing that stands it out is the very low interest rate favourable to farmers as well as the moratorium given out. No commercial bank or microfinance bank will give you a loan at such interest rate or grant you such moratorium and make profit.

This is so since their own principal aim is to make profit regardless of whatever happens after the loan is given. Another distinguishing factor is that loans van be restructured to suit the farmer after a careful study of the farm yield and the utilisation of the said funds.

The bank of agriculture has continued to get partnerships with many state governments, with all most all the states in the south and with many in the north. These partnerships involve the state govt partnering with and them, releasing some funds to be managed by the banks exclusively for farmers and farming activities in their states.

Those is bearing fruit since more and more people have realized the benefits inherent in going into farming. Some of the aspects of farming people can veer into includes poultry farming/egg production, piggery, snailery, fishery or fish farming.

Others include crops such as cassava, cocoa, cocoyam,yam, maize, rubber and so many others. Some of these crops can even be well packaged, exported to other countries and foreign exchange earned.

Besides that, mora cassava farmers are even required in the country at the moment since the current cassava farmers don’t seem to be able to meet up with the cassava requirements of companies in our domestic economy.

A visit to a cassava processing plant in Agbara, ogun state recently called Green life ltd was revealing. the management said they were looking for more cassava farmers all over the country to supply when since the present ones can’t meet up their daily demand. They had employed marketers to go deeper into the rural areas and look for more of them. This is just for one crop, cassava.

It is very easy now to get a bank credit from the BOA once the above mentioned steps have been followed. You must run the account continuous and form a good relationship with the staff of the branch you intend registering with as this will also go a long way in making it of ease. Many people have already taken advantage and many more are still taking advantage.

So I will urge any intending farmer and those who desire expansion to please walk into the nearest branch you can find.

In conclusion, agriculture remains one of the most rewarding ventures available. It has become sophisticated, & more mechanized since many people in the urban centres are averse since the picture that comes to mind when they hear agric is that of people working like slaves on the farmlands with little effort to show at the end. Every member of the country should do some part of agric they deem suitable.

The bank of Agric is there for you, all you have to do is walk in and take advantage of its services.

Functions of Nigeria Bank of Industry

The Nigeria Bank of Industry was established with a purpose, a unique purpose which was targeted towards promoting the industrial sector of the Nigeria’s economy.

The bank of industry was actually set up with a view to ensure that industrial production is encouraged, as well as, and value creation.

This was to make possible by the manufacturing and processing activities of businesses within the country through the assistant of the Nigeria Bank of industry.

The primary aims of setting up the Nigeria Bank of industry was to make financial provision for the industrial sector of the economy, including business support services.

The focus was to target sub-sectors, such as, agricultural businesses, and agro-allied businesses, and Solid minerals businesses, and oil / gas businesses, and manufacturing businesses.

Other businesses that were to be financed by the Nigeria Bank of industry were those businesses that involved in value chains production.

What Is Bank of Industry?

Bank of industry is a commercial and/or development bank, established to assist businesses that are into manufacturing and processing financially. Since its mandate is targeted towards the industrial sector of the economy, the Nigeria Bank of industry is saddled with the responsibility of financing equipment used in value chain production.

 Functions of The Nigeria Bank of Industry

There are a number of functions carried out by the Nigeria Bank of industry, in this article I am going to explain quite a number of them.

1. It Finances Plant and Equipment

The Bank of Industry main objective is to promote industrial sector of the economy, in doing so, it is targeted at financing plants and equipment only.

Financing raw materials and working capital of businesses are not in its financing preferences, let alone financing lands and buildings.

One of the core mandate of the bank of industry is primarily, that of financing industrial equipment. For instance, if someone is into agriculture business, area of financial assistant from the Nigeria Bank of industry would be that of equipment, therefore, the equipment that agriculture business would need for the production of its goods would be what the Nigeria Bank of industry would finance. In this case, it could be some farm or agriculture equipment, such as, tractors, and combine harvesters, and dryers, and freezers, and other such agriculture machinery.

2. It Disburses Funds to The Suppliers of Equipment

Another function of the Bank of Industry is that, in line with the equipment businesses require to carry out its production, the Nigeria Bank of industry would   disburse funds to the manufacturers or the suppliers of these equipment so as to supply businesses this equipment.

Since it is the bank of industry would finance the equipment in this context, it is therefore, incumbent on the Nigeria Bank of industry to make sure that proper finding is made, and the Bank has to ensure that all documents from the suppliers are vetted in order to prove the genuineness of the quotations and the equipment.

It is also incumbent on the bank of industry to make sure that the prices tag of these equipment are reasonable, not that the Bank of industry want to finance lower quotation, no, the reason for proper verification by the Bank of industry is to ensure that whatever equipment they purchase worth the value for the money.

In most cases, the Bank of industry will encourage businesses to first fine out whether there are locally made equipment, and where this become possible, then the assurance is that, there will be availability of locally made spare parts and support maintenance, and prices of equipment would be cheaper.

3. It Helps Businesses Source for Working Capital Requirements

One of the functions of the Bank of industry is that, it does assist businesses in sourcing for their working Capital requirements, and this is done through organizations who partners with the Bank of industry.

Like I said earlier, it is not the duties of the Bank of industry to finance working capital, but since the Bank of industry has gotten a network of partners, which of course, are other financial institutions, so what the Bank of industry does is to enter into a negotiation terms with these banks, the terms has to do with small and medium scale enterprise financing.

Therefore, in such situation, since the Bank of industry only finance equipment, when businesses apply for equipment financing, any business that would want the Bank of industry to help source for its working capital can also apply alongside with the application for equipment financing to the Bank of Industry, and because the Bank of industry is surrounded by a network of participating banks, the two loans would be provided.

4. Provides Business Support

The Nigeria Bank of industry is saddled with the responsibility of financing equipment used in value chain production. This is true, but besides provision of funds, the Nigeria Bank of industry is ready to give businesses the necessary support they may desire.

The functions of the Nigeria Bank of Industry is not just limited to providing finance to businesses. The Bank also take interest in ensuring that businesses succeed through its support.

The Bank of industry’s assistant or support in ensuing businesses succeed  starts from the very time, it is willing to ensure that businesses that applied for loans, access these loans at when due.

It does not just stop there, the Bank of industry will go as far as, ensuring that products do not struggle for sales, it will ensure that businesses make sales, generate profits so as meet their businesses goals and as well, pay back their loans.

The Bank of industry has achieved this through Business Development Support Providers. It believes that through Business Development Support Providers, every borrower would be assisted and supported throughout the life circle of their businesses.

Conclusion 

The primary aims of setting up the Nigeria Bank of industry was to make financial provision for the industrial sector of the economy, including business support services.

The focus was to target sub-sectors, such as, agricultural businesses, and agro-allied businesses, and Solid minerals businesses, and oil / gas businesses, and manufacturing businesses.

Other businesses that were to be financed by the Nigeria Bank of industry were those businesses that involved in value chains production.

Source:infoguidenigeria