Federal Government Agric Loan Application Guide 2019
Federal Government Agric Loan Application Guide 2019. Starting a business in agriculture requires big investments. Many people do not trust commercial banks to offer good loans with affordable interests, so they prefer good loans provided by the Federal Government because they think it’s more reliable and affordable.
This can be obtained from the Bank of Agriculture (BOA), a franchise of the Central Bank of Nigeria (CBN) and these loans are provided by the Federal Government. The bank has a shared ownership between the Ministry of Finance (60%) and the Central Bank (40%). The Ministry of Agriculture supervises and controls the operations of the bank.
The bank renders loans for agricultural businesses in Nigeria; they include micro loans and cooperative loans.
To begin, you have to determine what you need the loan for. You should have good reasons like developing new businesses, purchasing new equipments, maintaining your business, etc.
After discovering your reason for a loan, you have to check the available types of loan and the process of applying. For instance, the BOA offers the following types of loan:
- Micro Credits
These are given for businesses like trading, fish farming, livestock farming, raising crops, etc. some of these loans are never higher than N250,000 and is repaid within two years.
In order to obtain this loan, you need two guarantors and a 20% deposit. The interest rates for these loans vary between 12% and 20% yearly.
- Grow and Earn More
This loan is for women who want to start up a business. These types of loans are quite big, with amount of N1, 000,000 with interest rate of 14%.
To obtain this loan, you need two guarantors and a 10% deposit in the form of a savings account. This loan is the best option for women in the agriculture business.
- Individual SME Loans
These loans are for individual business persons. The highest amount given is N5, 000,000 which is for agricultural purposes. SME loans from the BOA usually come with interest rates of 14% to 20%.
Requirements for Bank of Agriculture (BOA) Loans
- You must have collateral for the loan.
- Also, You must have a detailed business plan which you will explain why you need the money and how you intend to use it.
- Finally, You must have a bank account to store part of the money that will be given to you.
Apart from these requirements, there are other requirements that only loan officers know. So if you are interested in getting a BOA loan, it’s advisable you inquire from a loan officer in a bank branch.
Applying for a Loan
Depending on the type of loan you are applying for, the processes may be different but some things will be common. For instance, you may be required to provide documents to prove the ownership of the business, a valid identity card such as driving license or passport and a prove that you can repay the loan.
However, the best guidance will be from a loan officer in a bank branch of the BOA who will give you detailed information on the loan and the processes of application to avoid any mistakes.
I hope you find this information useful.