Are you a farmer or a small business owner in Nigeria this post is for you kindly read this article to the end to see the step/ procedure to apply for Federal Government loan for farmers / loan for small businesses in Nigeria irrespective of the state you are coming from. Note that this Federal Government loan for farmers / loan for small business are for both farmers and small business owners who are looking to sustain their farming in the peak season with federal government agricultural loan.
Agriculture happen to be one of the sector in economy that cannot dwindle as long as you have the right tools to cultivate the earth. More so, it is very lucrative hence the reason why so many people both young and old now find pleasure going into it. But the question to ask is if they have the needed resources to excel in it?
2 reasons why Federal Government give loan to farmers
- To help sustain their farm in the peak
- To assist them to buy what they need to yield good product from their farm
It is very easy to declare you want to indulge in farming but are you ready for both the monetary and manpower capabilities? Do you know the ways of getting agricultural loans given by the federal government?
Some of the agricultural loans the federal government gives are:
The loan given by the Central Government of Nigeria
CBN provides loans for both existing and intending farmers and the perk about this loan is that the interest rate on it is quite low. Do you know that due to the introduction of this scheme, 75 billion naira has been set aside by the government in all states so loans can be accessed? Do you know where you can get this loan? From the Bank of Agriculture.
Micro SME Development Fund
This is equally another kind of loan that businesses can access. So if you want to expand your agri-business and you need a credit facility that is low-priced, this is what you are looking for.
What you stand to gain:
- You can get an overdraft or a term loan
- A low-interest rate of 9%
Bank of Agriculture (BOA)
You may wonder what BOA is all about. How can agriculture have a bank? Well, this is one sure way the government makes loans accessible to the public. The government owns it while CBN and the Federal Ministry of Finance are investors.
As an entrepreneur, here are the essentials before you can be given this loan.
- You should have partially paid 20% of the loan money
- You should have at least six months’ relationship with the bank in terms of making payments into your account no matter how small
- You should present a complete plan of your business
- There must be evidence of a physical collateral
Types of Federal Government loan for farmers in nigeria:
Micro Credit loans:
This kind of loan can be tapped into by traders and agriculturists who are into livestock, fishery, horticulture, agro-processing etc. Both individuals and co-operative society members can benefit from such a loan.
To access this loan;
- You must make available two guarantors and must have partially paid at least 20%
- Microcredit loans must not be more than N250, 000 and must not be more than 2 years
- The bank rate is 12% annually
Grow and earn more-(gem)
This loan scheme is specifically for women to help them in areas they are finding it difficult especially in the area of financing.
What does this loan entail?
- Before any application can be done, you must have a working account with the Bank of Agriculture office that is in close proximity to where your project is for at least 3 months
- You can only access N1 million at 14% annually
- The loan you will get will be based on your type of project
- You must present two guarantors and have partially paid 10%
- Presentation of collateral is not needed
- The interest rate is 14%
How to apply Federal Government loan for farmers
loan for small businesses in Nigeria :- Loan application for SME (Individuals)
- Here, individuals can get loans up to N5, 000, 000 as long as your projects are agriculturally based
- Presentation of collateral is compulsory
For the loans that can be gotten from the Bank of Agriculture, what is needed to open an account with them are:
- Account opening form must be updated and signed
- Updated mandate
- A letter to the bank already signed
- Any means of identification (photocopy)
- Photocopy of the latest utility bill
- Latest passport photographs (3)
- Part payment of at least N3, 000
- Letter of set-off already signed
Get loan from international body HERE
How to apply loan for small businesses in Nigeria
Apply for the loan here https://www.cbn.gov.ng/devfin/acgsf.asp