The 2019 Government Loans For Agriculture In Nigeria: How To Apply
There are lots of government loans and grants for agriculture that you can apply for in this year 2019. The question is no longer whether you want to farm or not. It is currently visible to the blind that the agricultural sector in Nigeria is currently the most viable in the Nigerian economy. For you that are already into agribusiness venture or considering starting one; this article will definitely be of great help to you.
In Africa today and in Nigeria especially; agriculture has been identified as the largest employer of labor. The agricultural sector has been described by many analysts as a goldmine that is waiting to be fully explored. If you have not been considering having an agribusiness investment in Nigeria, you better have a rethink in this year 2019.
When you consider the available land for agricultural activities in Nigeria, you will be overwhelmed. There is a recent report showing that Nigeria currently has about 84 million hectares of arable land for agricultural purposes. Of these 84 million hectares, only about 40% is currently in use. You can ask yourself why it is so.
The question is no longer whether agribusiness investment is profitable because it has been proven that the profitability is beyond words. The major challenge that young agribusiness entrepreneurs face is classified into two:
- What type of agribusiness to start, and
- How to raise the startup capital for the agribusiness venture.
On the challenge of what type of agribusiness to start in Nigeria, you can visit Entorm Agriculture to see different agricultural businesses that you can start in Nigeria this year 2019. The second challenge is the main focus of this article. In this article, we will be exploring the major 2019 government loans and grants for agriculture in Nigeria. Just sit tight and keep reading, I assure you that you would be glad that you did.
Related: Top Agricultural business ideas to start.
2019 Government Loans And Grants For Agriculture In Nigeria
The one very good way any government can motivate her citizens to venture into agricultural businesses is the provision of government loans and grants. In order to improve the agricultural sector as well as encourage farmers and agribusiness investors to embrace agriculture, the Nigerian government has different schemes and programs to provide funds in form of loans and grants to both small and large-scale farmers in Nigeria.
This 2019 government loans and grants in Nigeria cover a range of agricultural practices like livestock farming and crop cultivation. There are different avenues that the Nigerian government has provided for corporate bodies and individuals to access these 2019 government loans and grants. Some of the avenues for the federal government agricultural loan include;
- The CBN agricultural loan to farmers in Nigeria
- The bank of agriculture (BOA) loan
The CBN agricultural loan
For the 2019 government loans and grants from the central bank of Nigeria comes in three major schemes. These federal government loan schemes for youth and older farmers or agribusiness investors in Nigeria are worth looking into. These federal government agricultural loan schemes from the CBN include:
Commercial Agriculture Credit Scheme (CACS)
The Central Bank of Nigeria, as part of its developmental role in collaboration with the Federal Ministry of Agriculture and Water Resources, established the Commercial Agriculture Credit Scheme in 2009. The objective is to provide finance the agricultural value chain (production, processing, storage, and marketing).
The main purpose of this scheme is to provide funds to large-scale commercial farmers at a single digit maximum interest rate of 9%. It will interest you to know that as part of an effort by the federal government of Nigeria through the CBN to increase access to finance and reduce exclusion rate, there has been a revision of the existing Commercial Agriculture Credit Scheme (CACS) guidelines. There is now the inclusion of Non-Interest Financial Institutions (NIFIs).
This means that you can now access federal government agricultural loan through the CACS without interest. This scheme is sub-component of the Federal Government of Nigeria Agriculture Development Programme (CADP). It is financed through an N200 billion bond that is raised by the Debt Management Office (DMO).
For more detailed inquiry about the requirements and application, you can visit the official website of the Central Bank of Nigeria or contact the public relation office of Commercial Agriculture Credit Scheme (CACS) on +234946237602.
Agricultural Credit Support Scheme (ACSS)
This is another avenue through which you can access the 2019 federal government loans and grant for agriculture in Nigeria. The ACSS is a federal government agricultural loan initiative with the Central Bank of Nigeria; with the strong participation of the Bankers Committee. The prescribe fund of this scheme is N50 billion.
The objectives of the Agricultural Credit Support Scheme (ACSS) is to lower the cost of agricultural production, enable Nigerian farmers to explore the huge untapped potential of the Nigerian agricultural sector, generate a surplus for export, and increase the foreign earnings of Nigeria through agriculture.
At the federal level, ACSS operates through a central implementation committee, while the 36 states and FCT operate through a state implementation committee to see that the objectives of the scheme are met efficiently throughout Nigeria.
For you to apply for these 2019 federal government loans and grants for agriculture under ACSS, you should be a farmer or agro-allied entrepreneur with means. You can apply through your bank(s) for this loan through your state chapter of farmers association and state implementation committee. Large-scale farmers in Nigeria are also allowed to apply directly to the banks adhering to ACSS guidelines.
Agricultural Credit Support Scheme funds are given to Nigerian farmers and agro-allied entrepreneurs at a single digit interest rate of 8%.
Agricultural Credit Guarantee Scheme Fund (ACGSF)
This is another avenue through which the federal government loans and grants can be accessed in Nigeria this 2019. Established by Decree No. 20of 1977and started operations in Nigeria in April of 1978, the ACGSF guarantees credit facilities given to Nigerian farmers by banks up to 75% of the amount in default net of any security realized. It original share capital and paid-up capital were N100 million and N85.6 million respectively.
The Central Bank of Nigeria manages the day-to-day operations of the ACGSF. There is a guideline which stipulates the eligible individuals and enterprises that qualify for this fund under the federal government agricultural loan initiative.
The application forms for the 2019 federal government loans and grants under this scheme are obtained from all the participating commercial banks in Nigeria.
For more details on the above listed federal government agricultural loan overseen by the CBN, see the development finance report publications of CBN.
Bank Of Agriculture Loan In Nigeria
Federal government loans and grants for agriculture is majorly disbursed to Nigerian farmers through the Bank of Agriculture (BOA). The BOA is a property of the federal government of Nigeria, with the CBN and the Federal Ministry of Finance incorporated as shareholders. The activities of the Bank of Agriculture are supervised by the Federal Ministry of Agriculture and rural development.
For you to apply for the 2019 government loans and grants in Nigeria through the Bank of Agriculture, the following requirements must be met:
- You must provide a detailed business plan for your agribusiness.
- You should have at least 20% of the required loan amount in your account
- You must provide collateral with the exception of land.
- You must have a maintained customer account relationship that is not less than six months.
Even with the aforementioned requirements for accessing government loans and grants for agriculture through BOA, it is still very much negotiable and is largely dependent on the feasibility of your agribusiness venture. You can get more details regarding federal government agricultural loan from BOA on the official website of the bank of agriculture.
The year is still very much young and full of endless opportunities in the agricultural sector. There is nothing stopping you from trying out these above-mentioned avenues to access 2019 federal government loans and grants for agriculture in Nigeria.
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