The Nigerian Government has been seriously concerned about agricultural development in the country. There is an ever-increasing need to boost domestic products in the country by agricultural production hence the need for financing.
Loans for farming or Agric loans in Nigeria are loans planned for a number of agricultural production purposes. The farmers are to apply for loans for the acquisition of food grain crop supplies along with other things that can boost the sector at large.
Several countries around the world have astonishingly established their economies by modern and mechanized farming. This poses Nigeria in a questionable state on why it still depends largely only on crude oil exportation when agriculture can be the biggest boost to the economy.
Even as it is, the agricultural sector in Africa still got some accolade, currently, in Western Africa, the Agricultural sector remains the highest employer of labour. However, it’s not anything better than manual farming, which in most cases cannot do more than fulfill families’ needs.
These and more factors have prompted the Federal Government of Nigeria to introduce farming grants and credit programs. pThe Central Bank of Nigeria (CBN) has budgeted over N200 billion for agricultural interest, this is ut in place via the Bank of Agriculture and other commercial banks in the country.
Other investments for which agric loans can be made available include arable land for agricultural purposes, the construction of biogas plants, and farm water systems.
In collaboration with the Bank of Agriculture and the Central Bank of Nigeria €200 billion naira was allocated to fund farmers’ production nationwide.
Nigeria has the capacity to become a world-class player in agriculture, as market development programs remove constraints on sector growth and build skills. Credit is a key factor in agriculture development, rural areas, and small medium-sized businesses, this simply because It promotes the formation of capital and the upgrade of technology.
Agriculture still remains the major source of earnings for more than fifty percent of the country’s population, the majority of Nigerian rural populations still rely on agriculture as a business.
Although the majority of Nigerians live in rural areas and is dependent on agricultural output, the financial services supply which is just around 5 percent of domestic resources for the agricultural sector allocated is largely insufficient.
The population of Nigeria is projected to be 180 million, according to the World Bank. The Nigerian economy’s scale or GDP is N18.3 trillion. The economy of Nigeria can be split into two components: the oil and non-oil sectors.
Agriculture and other sectors such as knowledge and technology, accommodation and food service providers, creative industries, finance, and insurance, skilled scientific and technological services, education, and other services are also part of Nigeria’s non-oil sector.
Four sub-activities are constituted in agriculture in Nigeria: grain production, poultry, forestry and fishing. Though Nigeria’s economy is overwhelmingly oil-dependent, agriculture remains a major contributor to Nigeria’s economy.
The National Bureau of Statistics had it in one of their reports that the agriculture sector (total N4,575 trillion) accounted for 25 percent of Nigeria’s GDP and 70 percent of Nigeria’s labour force. Economic development in Nigeria has been guided by increases in agriculture, telecommunications, and utilities in the last five years.
Some Agricultural Businesses in Nigeria that needs loan or grant
Given the many agricultural challenges in Nigeria, there are several farming corporations operating both and large scale production and some others for small scale.
The market is open to private interest and there are lots of investment incentives around the multiple valuation chains. These include mechanized crop production, such as rice, maize, millet, cassava, sugar cane, tomato, and cash crops, including cocoa, palm kernel, and rubbers.
Beef production and packing Food manufacturing and recycling through the supply chains Fruit juice / canned fruit Cash production juices — coffee, palm kernel, rubber, and others — timber and timber manufacturing activities Livestock agriculture — dairy farming, and aquaculture advancement.
- Market study.
- Business analysis.
- Delivery of pet product products, medicines, additives, supplements, and foods.
- Creation of water supplies in particular for agriculture and flood control systems.
- Private irrigation facility production.
- Supplies of farm products and equipment.
- Design and production of the correct mechanized small-scale technology for agricultural processing and secondary manufacturing.
- Distribution of commodities.
- Horticulture advancement.
- Enhanced seed and agrochemicals quality.
Key Reasons to Invest in Nigeria’s Agriculture
- Favourable weather promoting year-round agricultural activities
- Well mapped-out soil characteristics throughout the nation to help the cultivation of crops
- friendly government policies aimed at fostering modern and mechanized agriculture and agri-businesses
- Accessibility of farmland suitable for arable farming throughout the nation, reports have it that there are well over 3.14 million hectares of irrigable farmlands
- massive shortage gap between agricultural supply and industrial operations.
Where to Get Agric Loans and grants in Nigeria
Agricultural Credit Guarantee Scheme Fund (ACGSF)
Funds are required for the purchasing of agricultural lands, houses, trees, equipment, seedlings, function, and irrigation schemes to mention only a few in the farming business. Such a fund is also collosive beyond farmers’ control.
This is why the Federal Government has formed the Agricultural Credit Guarantee Scheme Fund (ACGSF), as a subsidiary unit of the Central Bank of Nigeria (CBN).
Through Decree No. 20 of 1977, the ACGSF was created and began operations in April 1978. The initial share capital and paid-up investment contributed were N100 million and N85,6 million. The Federal Government owns 60%, while the Central Bank of Nigeria keeps 40% of the capital. In March 2001, the Scheme’s capital base was expanded to N3 billion.
The Fund ensures credit facilities provided by commercial banks to farmers is increased to up to 75 percent of the net default value of each loan. The Fund is controlled by the Nigerian Central Bank, which oversees the scheme’s day-to-day activities.
Commercial Agriculture Credit Scheme (CACS)
The Central Bank of Nigeria (CBN) set up a Commercial Agriculture Credit Program (CACS) to fund, in cooperation with the Federal Ministry of Agriculture and Water Supply (FMA&WR), the agricultural value chain (production, processing, storage and markets). Increased investment output will ease inflation and help the Bank meet its target of market stabilization nationwide.
Agricultural Credit Support Scheme (ACSS)
The ACSS is yet another Federal Government and Central Bank of Nigeria project with strong intervention and funding from the Bankers’ Committee.
The Program functions at the Federal level through a Central Implementation Council (CIC), while at the Federal Capital Territory (FCT) and State levels it acts through the formation of State Implementation Committees (SICs) in order to ensure that the program goals are met unimpeded.
The Scheme has N50 billion administered fund. ACSS has been developed to allow farmers to harness Nigeria’s unexploited agriculture sector capacity, boost the economy, reduce the agricultural production cost, , generate an export surplus, raise Nigeria’s foreign revenue.
LAPO Mocrofinance Agric Loan
Agriculture is the main pillar of every economy and is important for any nation’s socio-economic growth. LAPO MfB has therefore developed an agricultural loan to fund the farms of persons, groups, or businesses. The repayment plan is structured to match the seasonal condition of farming businesses.
LAPO MfB won the Central Bank of Nigeria (CBN) as the Best Microfinance Bank in Agricultural Finance in 2016 under the Agricultural Credit Guarantee Scheme of 2015.
Bank of Agriculture
Bank of Agriculture (BOA) Limited was operative in 1972 as the Nigerian Agricultural Bank (NAB). In 1978, the name of the institution was modified to the Nigerian Agricultural and Co-operative Bank (NACB).
The NACB, the People’s Bank of Nigeria (PBN) and the risk assets of the Family Economic Advancement Plan (FEAP) were combined into the Nigerian Agricultural, Co-operative Rural Development Bank (NACRDB) Limited in October 2001 following attempts by the Federal government to streamline its agencies’ operations.