How To Obtain Bank Of Agriculture Loans In Nigeria
Bank of Agriculture is a Nigerian government sponsored bank that provides credit facilities to both small and large scale farmers and small businesses inside provincial areas. A result of a restructuring of government sponsored microcredit institutions, the bank was formed in 2000 and assumed the assets of the National Agriculture and Cooperative Bank, People’s Bank and the Family Economic Advancement Project.
Bank of Agriculture (BOA) Limited was incorporated as Nigerian Agricultural Bank (NAB) in 1972 and got operational in 1973. In 1978, the institution’s name was changed to Nigerian Agricultural and Co-operative Bank (NACB) Limited to reflect a more extensive mandate.
After ten years, in October 2010, the Bank was rebranded and it adopted the new name Bank of Agriculture (BOA) Limited as a component of its Institutional Transformation Program.
Presently, the bank has a wide network of branches all over Nigeria. It is ceaselessly giving loans and support to Nigerians. The bank is claimed significantly by the Central bank of Nigeria (CBN) and the Federal ministry of finance.
The bank is supervised by the Ministry of Agriculture and managed by the Central bank of Nigeria. It plays a major job in the SME sector of the Nigerian economy
Major Functions
- Provision of farming credit to support all agrarian value chain activities.
- Provision of non-farming micro credit
- Savings assembly
- Capacity development through advancement of co-operatives, farming information systems, and the provision of technical support and extension services.
- Provision of opportunities for self-employment in the country areas, in this manner lessening provincial urban relocation.
- Inculcation of banking habits at the grass-roots of the Nigerian society.
Strengths
- Nigeria’s largest development finance institution and driving agricultural finance institution.
- DFI with the highest provincial operational coverage across the nation, with 201 outlets across the nation, 6 zonal offices and a head office.
- Highest cooperation/interface with rustic farmers with profound institutional information on country and rural finance.
- Over 40 years experience in provincial and rural finance.
- Strategic partnerships with USAID markets, IFAD, World Banks, RUFIN, and ECOWAS funds, Federal Ministry of Agriculture and Rural Development, Federal Ministry of Women Affairs, State and Local Governments, and so forth.
SERVICES THE BOA PROVIDES
Direct Credit Product
This product was Developed to finance agricultural productions and Agro-partnered operations. Loan volume ranges from above N250,000.00 to a maximum of N50,000,000.00. It has a Limit of N5,000,000.00 to singular persons and Above N5,000,000.00 to corporate organizations. Other specific details of this product are listed below.
- Loan tenor not surpassing 5 years.
- Disbursement both cash and kind.
- For individuals and cooperate bodies.
- Staggered disbursement .
- Backed up with reasonable, gainful and bankable business proposal.
- Agro-business must be a clause in the Memart of the organization for corporate applicants.
- Security satisfactory to BOA requirement
- Interest rate 14% for farming production and agro-processing while item marketing is 20%.
- Current tax clearance certificate required.
- Last 3 years audited statement of account or statement of affairs required.
- Consent to mortgage of the landed property
Large Credit Product
This product was Developed to finance large rural production and Agro associated operations. The Loan volume going from over 50 million to a maximum of 1 billion for a single obligor. It is Accessed by corporate bodies as it were and Loan tenor cannot surpass 5 years. Other details are listed below.
- Disbursement both cash and kind.
- Staggered disbursement.
- Backed up with practical, gainful and bankable business proposal.
- Agro-business must be a clause in the Memart of the organization for corporate applicants.
- Security satisfactory to BOA requirement.
- Interest rate 14% for farming production and agro-processing while at the same time marketing is 20%.
- Current tax clearance certificate required.
- Last 3 years audited statement of account or statement of affairs required.
- Consent to mortgage of the landed property
Youth Agricultural Revolution In Nigeria (YARN)
This scheme was Developed to encourage Nigerian Youths to key into agriculture and accept it as an investment or business. The maximum advance limit under this product is N1 million per beneficiary. The beneficiaries must be small holders as characterized under the Nigeria Incentive Risk Sharing for Agricultural Lending (NIRSAL) guidelines.
To encourage unhindered access by these target groups, the beneficiaries need not have collaterals yet must give adequate guarantors. The loans are accessible by individuals or groups. The individuals in the gathering can get N1 million each subject to technical determination of scope and budgetary requirements of the project.
The loans can be access by individuals and groups in accordance with NIRSAL Credit Risk Guarantee (CRG) and Interest Draw Back Program (IDP). Loan period, Grace or Moratorium on the products will be determined based on the project type.
- NIRSAL provides 75% credit guarantee.
- Interest Rate 12%.
Grow And Earn More (GEM)
This was Developed to encourage Nigerian women to key into agriculture and accept it as a business. The maximum credit limit under these products is N1million per beneficiary subject to technical determination of the scope and the input requirements.
The beneficiaries must be small holders with the required land for development or any of the value chain products. To encourage unhindered access by these target groups, the beneficiaries need not have collaterals. In lieu of this, there will be security substitutes such as satisfactory and adequate guarantors with undeniable income, NIRSAL Credit Risk Guarantee to cover 75% of advance misconduct.
The loans are accessible by individuals or groups. The individuals in the gathering can get N1 million each subject to technical determination of scope and money related requirements of the project. Loans Period, Grace or Moratorium on the products will be determined based on the project type and the gestation of the project. The Interest Rate is 12%.
On – Lending Credit Product
- Provision of security which could be insurance security or unalterable standing payment order (ISPO).
- Provision of suitable productive and bankable business plan.
- Interest rate negotiable.
- On-lending association responsible for recuperation of the credit inclusive of the gathered interest.
- Reduces cost of credit administration.
- Allows reaching various customers.
Input Procurement Credit Facility
The new product/approach has realized a change in outlook in the farming sector with an essential goal of focusing on agriculture as an investment or as a business instead of a developmental project. This has consequently brought forth what is presently known as Agricultural Transformation Agenda (ATA) of the Federal Government of Nigeria. Details of this product include:
- Purchase of breeders seeds from Research Institutes.
- Supply these inputs to their out-growers.
- Pay for the labor services to be given by the out-growers.
- Pay for the extension services.
- Buyback the seeds from the out-growers as certified seeds to be sold to farmers as improved seeds to upgrade productivity which is a limiting factor to Nigeria farmers.
- Fertilizer companies will require this kind of facility to empower them.
- Import fertilizers.
- Establish new fertilizer blending plants.
- Resuscitate existing and closing down businesses
Collaboration
This involves the establishment of formal relationship with a third party to execute agricultural credit projects together. It is another strategy through which the Bank reaches customers at the grassroots. Some of the Bank’s collaborating partners are: Federal, States and Local Government Agencies, NGOs, Micro-Finance Banks, Micro-finance Institutions, Financial Co-operatives and so forth.
Steps to obtain achieve this are:
- Formal expression of interest to collaborate with the bank.
- Submission of collaboration proposal
- Appraisal of the proposal by the bank.
- Terms and Conditions worked out.
- Preparation of Memorandum of Understanding (MOU).
- Executed MOU must be sent to executing zones and branches for proper usage and checking.
- Interest Rate Negotiable.
Mechanization Service Provider Operators
BOA is driving the Private Sector ATA Mechanization Intervention Program of the Federal Ministry of Agriculture and Rural Development.
The experimental run program is proposed to establish 80 Agricultural Hiring Centers across the nation. Each inside will be outfitted with five(5) tractors alongside the execution and other agrarian machineries and equipment.
The details of this product are listed below:
- Must be a limited liability organization appropriately registered with Cooperate Affairs Commission.
- Agro-business must be clause in the Memart.
- Board resolution to access facility from bank of agriculture .
- Provision of suitable, beneficial and bankable business plan/feasibility study.
- Must be appropriately registered with the National Agricultural Seed Council (NASC) on account of seed companies.
- Evidence of quality control unit on account of fertilizer companies.
- Agricultural machineries and equipment to be financed must be certified by the National Center for Agricultural Mechanization (NCAM) on account of Agricultural Service Provider Operators.
- Recent tax clearance certificate required
- Last 3 years statement of audited account
Component of the Agricultural Value Chain
Warrant age or Inventory Credit Facility. Here farmers will be given credit for dry season income creating activities after the harvest of their produce, while their harvests will be kept in stores and serve as security for the credit extended.
Characteristics are:
- Involves farmers, guarantee managers and the bank
- The commodities must be inspected and certified by guarantee managers
- The commodities must be discounted by 30%
- It finances a short conversion cycle project
- Goods in the warehouse are insured
Agro-Processing Facility
To make sure of National Food Security and diminish post-harvest losses, the Bank has developed a credit product known as “Agro-processing Facility”.
The facility will give funds to existing or potential private investors who desire to establish a urban or cottage agro-processing industry.
The existing or potential private investors may require one or the entirety of the following:
For limited liability companies
- Companies appropriately registered with Cooperate Affairs Commission (CAC)
- Agro-business to be a clause in the Memart of the organization
- Board resolution to access facility from bank of agriculture
- Provision of suitable, gainful and bankable business plan/feasibility study.
- Evidence of registration with NAFDAC
- Recent tax clearance certificate required
- Last 3 years statement of audited account or statement of affairs on account of new companies required.
Haulage Credit Facility
This credit facility is developed to support private investors who are engaged in transportation of agrarian goods. The facility to be accessed by these investors will be used to get trucks or different types of vehicles as the needs direct.
For limited liability companies, details of the product are listed below.
- Companies properly registered with Cooperate Affairs Commission (CAC)
- Agro-business to be a clause in the Memart of the organization
- Board resolution to access facility from bank of agriculture
- Provision of practical, productive and bankable business plan/feasibility study.
- Recent tax clearance certificate required
- Last 3 years statement of audited account or statement of affairs on account of new companies required.
Ranching Development Credit Facility
The bank in its efforts to support the National Food Security presented a credit product called “Ranching Development Credit Facility”. The presentation of this facility will go far to arrest the current incessant clashes between the Crop farmers and headsmen. Details of this scheme are listed below.
- For limited liability companies.
- Companies properly registered with Cooperate Affair Commission (CAC).
- The organization must incorporate Agro-business as a clause in its Memart.
- Board resolution to access facility from bank of agriculture.
- Provision of reasonable, beneficial and bankable business plan/feasibility study.
- Recent tax clearance certificate is required.
- Last 3 years statement of audited account or statement of affairs on account of new companies is required.
Fare Finance Facility
This product is in accordance with the Federal Government’s drive to hasten economic development by empowering job creation and improving the present dismal balance of trade in Nigeria thus easing pressures on scarce foreign exchange presently sent to the importation of food commodities and different items
It is a short term facility under this program, BOA provides credit financing at pre-shipment and invoice discounting of affirmed orders at the post-shipment stage; in this way assisting Nigerian exporters in making sales that may not otherwise happen.
The product provides direct credits to exporters for production or obtainment at pre-shipment and avails invoice discount at post-shipment on the bases of payments due from foreign banks under affirmed letters of credit (LCs) to Nigerian exporters. It is the Nigerian exporter who must request for an affirmed letter of credit and bear the cost of confirmation.
As such, the exporter may factor this cost into the selling value before the agreement arrangement process. The post shipment discount covers up to 70 percent of the fare proceeds while pre-shipment financing shall be 70 percent of unquestionable fare off-take contract.
Cooperative Family Feeding Program (CFFP)
This product was developed to make agrarian produce promptly accessible to all at focused prices while ensuring strict adherence to international standards, certifications and regulations material to food processing.
This product program is a piece of the plan to ensure consumption of locally produced food stuffs in accordance with the Federal Government’s resolve to encourage the conservation of scarce foreign exchange presently sent to the importation of food commodities, while at the same time making significant jobs in the agrarian sector.
With food issue settled on the home front, it is normal that productivity of beneficiaries would improve even at work, while their general prosperity is relied upon to also improve. The target customers are as follows;
- Corporate organizations or co-operatives that can guarantee a minimum of 1,0000 staff/members equipped for taking care of N40,000.00 – N60,000.00 more than 3 months (quarterly) from their salaries or income at a proportion of 40% (Month 1): 30% (Month 2): 30% (Month 3).
- Independent working class with an income of at the very least N50,000 Monthly ready to register with perceived cooperative bodies (for example Abuja Cooperative Financing Agency and Lagos State Cooperative Federation)
- Existing registered members of these cooperative bodies (Abuja Cooperative Financing Agency and Lagos State Cooperative Federation).
READ ALSO: How to Obtain Bank of Industry Loan In Nigeria
REQUIREMENTS
There are various requirements to open an account with the Bank of Agriculture and approach loans.
Individuals
These are the requirement for individuals who wants to open an account with BOA:
- Completed and signed Account Opening Form
- Completed Mandate/Signed Card
- 3 (Three) ongoing passport photographs
- A ongoing duplicate of Utility bill ( PHCN, Water ,and so forth.), photocopy just required
- Signed Letter to the Bank
- Signed Letter Of Set-Off
- A photocopy of means of identification (National I.D Card, International Passports or Driver License)
- At least, a minimum of N3, 000.00 as Initial Deposit.
Companies, cooperate societies, clubs, groups and its like
These are the requirement for Companies, cooperate societies, clubs, groups and its like:
- Completed and Signed Account Opening Form
- Completed Mandate/Signed Card
- Three (3) late passport photographs each from the Executives
- A late duplicate of Utility bill ( PHCN, Water and so on), photocopy just required, to be submitted by the every one of the Executive
- Resolution to open Account with the Bank
- Copy of Rules or Constitution ( Original duplicate to be sighted)
- Memo and Articles of Association( Original duplicate to be sighted)
- Certificate of Registration/Incorporation( Original duplicate to be sighted)
- At least, a minimum of N10, 000.00 as Initial Deposit.
Bank of Agriculture interest rate
The interest rates varies on various metrics. Here is an image of the rates:
- 14% per annum for SME Agricultural production
- 14% per annum for SME Agro-processing
- 20% per annum for SME Agriculture Marketing
- 12% per annum for Micro Credit Loans agric
- 20% per annum for Micro credit advance (Non Agric)
- 14% per annum for YARN and GEM products
The most effective method to get a credit from the Bank of Agriculture
Follow these steps to get an advance from the Bank of Agriculture (BOA):
- Get your document prepared
The first step towards getting an advance from BOA is to ensure that you have all requirement prepared. On the off chance that you check above, we have listed the requirements.
- Visit any BOA branch close to you
You would then be able to take your documents to the nearest BOA branch or endorsed bank close to you. Tragically, their website have been down, so it is unrealistic to apply by means of the Bank of industry website right now. You can check area of Bank of Agriculture branches close to you here.
CONCLUSION
The bank of agriculture has always been there to help Nigerian farmers to help improve and build their operations in order to eradicate hunger, unemployment and poverty all over the nation. It also provide loans for startup businesses to help build their business and help provide necessary facilities and services that will help the business grow easily.
We do sincerely hope this article provides all the necessary information about all you need to know about Bank of agriculture loans and how to obtain them.
To register your Business with CAC kindly call these numbers for further information: 08105636015, 08076359735.
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