The Bank of Agriculture (BOA) is a bank that is owned by the government and provides loans for farmers and other agro-related companies. It is the Bank of Agriculture (BOA) is a bank that provides funding to companies involved in agriculture production or agricultural business.
The work of the BOA is to:
- Credit is provided to help agricultural activities throughout the value chain
- Microcredits for non-agricultural businesses
- Savings are mobilized
- Building capacity in the field of agriculture
The BOA is the most prominent agriculture bank in Nigeria through the assistance of more than 200 retail outlets across the country, with six zonal offices and its head office in Kaduna.
The BOA is a partner with some different development finance organizations (DFIs), like the Bank of Industry (BOI), the Central Bank of Nigeria (CBN), and the Development Bank of Nigeria (DBN).
Types of loans and funding are available via the Bank of Agriculture.
The BOA's Agro-Processing Facility provides funds for the establishment of cottage or urban agro-processing businesses. Agro-processing is a vital part of the agricultural value chain. Through this facility, the BOA strives to improve that food security is guaranteed across the nation and minimize losses from post-harvest.
Direct Credit Product
The facility was created by the BOA to fund agricultural production as well as other agro-related activities. The facility is accessible to individuals as well as corporate companies.
Read also : Federal Government loan for businesses.
In contrast, individuals are able to access the sum of N5 million; corporations may be able to borrow as much as N50 million. In both instances, the loan tenors must not exceed five years.
A rate of 14% is applicable to agricultural production as well as the processing of agro products. People involved in the marketing of commodities will be charged 20% interest applicable to all money borrowed.
Equipment Leasing Product (ELP)
By using the Equipment Leasing Product, the BOA is seeking to improve the efficiency of agriculture companies in Nigeria by offering them the opportunity to improve certain of their operations.
By increasing the efficiency levels of agribusinesses, output could increase, which will satisfy the needs of the country and possibly make a surplus to export. Automated equipment could also cause an increase in the standard of products made, which could aid in making Nigerian products more appealing to foreign buyers.
Nearly any kind of equipment is available for lease in the event that it results in an increase in the production of agricultural products.
Read also : CBN loan worth up to ₦2billion Naira.
Export Finance Facility
The Export Finance Facility is designed to facilitate the export of agricultural products in order to help bring valuable foreign exchange to Nigeria. Through this program, it is also expected that wealth and jobs will be created.
It's a short-term credit facility in which the BOA can offer both pre-shipment credits as well as post-shipment discounting on invoices. With export finance, Nigerian exporters are capable of making sales that they would not have had the chance.
The pre-shipment stage is where 70% or more of an enforceable export off-take contract could be funded. Post-shipment discounts can cover 70% or more of export profits. Discounting is offered in exchange for a certified note of credit (issued by the importer).
Expand as well as Earn More (GEM)
It is the GEM credit facility was created as a vehicle to bring more Nigerian women involved in agriculture.
Beneficiaries must be small-holders and have the necessary land to cultivate or for the production of products in the value chain of agricultural products.
Read also : Development bank of Nigeria (DBN) loan worth at least ₦10million.
It is not necessary to provide collateral in this facility. However, the need for guarantors is sought.
An amount of N1 million is possible to borrow with an interest rate of 12%.
Haulage Credit Facility
The Bank of Agriculture product was designed to help companies involved in the transportation of agricultural-related products. Businesses can avail of this loan to purchase trailers, lorries, and related vehicles.
The Credit Facility for Hides, Skin Revival, and Hair
Through the Bank of Agriculture's Hides and Skin Revival Credit Facility, Investors have access to cash which is used to create companies across the leather or hide value chain.
One of the objectives of the plan is to boost the earnings in foreign exchange for Nigeria by exporting leather and hides.
Read also : Bank of Industry (BOI) loan.
The Credit Facility for Input Procurement
The Input Procurement Credit Facility is designed to help companies pay for their purchases of agricultural inputs -- throughout all levels of the value chain.
Business activities that are eligible include those that involve the purchase of seeds from breeders as well as the sale of seeds to Nigerian farmers, as well as the production or import of fertilizer.
Inventory Credit Facility
Through the Inventory Credit Facility, the BOA provides credit to farmers for income-generating actions (after when the crops have been harvested). The produce).
The produce that is harvested is kept in warehouses or storage facilities and is used as collateral for the loan. The stored goods are covered. This may be used to fund a short project to convert the cycle.
Large Credit Product
The Large Credit Product facility is only available to major corporations. companies involved in farming or related agro-related businesses can apply to apply for the loan.
Read also : Nigerian Export-Import Bank (NEXIM) loan worth at least ₦10million.
An amount of N50 million is able to be advanced with a maximal amount that is N1 billion. Repayments can be spread over a maximum time of five years. The rate of interest applicable will be 14% in the case of the production of agricultural products and 20 percent for trading or marketing activities.
Ranching Development Credit Facility
With this facility, the Ranching Development Credit Facility, the BOA is aiming to help support this National Food Security program. The launch of the credit facility will permit companies to make investments in the creation of ranches throughout the United States.
This will aid in helping Nigeria grow more sheep and cattle.
Sugar Revival Credit Facility
To boost local sugar production in Nigeria, it is the Federal Government of Nigeria has developed an initiative called "The Nigeria Sugar Master Plan." The BOA is working, in conjunction with the National Sugar Development Council, to ensure the implementation of the plan.
In the scheme, funds are available to any company in the value chain of sugar. In addition, both individuals and corporate entities can be eligible for funding.
Read also : Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Loan.
Youth Agricultural Revolution in Nigeria (YARN)
The YARN credit facility was set up to motivate young people in Nigeria to be involved in agribusiness. The maximum amount is N1 million is able to be advanced with rates of 12.5%.
The collateral requirement is not necessary to participate in this scheme. However, personal guarantors will be required.
Beneficiaries must be smallholders, as specified in the Niger Incentive Risk Sharing for Agriculture Lending (NIRSAL) Guidelines.
Eligibility for a Bank of Agriculture loan
Every business that engages in Agro-related business activities can be eligible for a loan at the Bank of Agriculture.
For the vast majority of the credit facilities available are offered, the BOA generally does not fund individuals. So, if your business has not yet been recognized by the Corporate Affairs Commission (CAC), You will have to first register your business with the CAC.
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In contrast to other institutions for development financing (BOA, CBN, and DBN), The Bank of Agriculture does lend directly to the consumer.
To access credit, you might have to establish your account at the BOA at one of their branches located across the country.
How do you submit an application for the Bank of Agriculture loan?
If your company is looking to apply for a BOA loan, go to the nearest Bank of Agriculture branch or outlet. In the branch, you can indicate that you wish to apply for a loan.
When you apply, you might be asked which you are applying for and what credit institution (mentioned earlier) you are most looking for. If you're not sure, BOA staff should be capable of assisting you in applying for the credit facility that is most suitable for your needs.
The reason for the loan, as well as your business's ability to be evaluated. If the results of the assessment are favorable, the loan will be approved to receive the loan.
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Usually, full approval comes with you meeting certain conditions/requirements highlighted in a pre-approval letter.
The requirements for the application of a BOA loan are different based on the factors that determine the amount of the loan sought and how big your company is. In any case, there are a few basic documents you'll be required to present, such as an outline of your business plan, a declaration of the loan's purpose and financial statements, as well as tax receipts.
A list of what's required prior to when a loan can be approved. This checklist may be:
- Application form completed
- Company profile
- Business plan
- Budget for cash flow
- Statements from banks (12 months)
- Audited financial statements
- Tax clearance certificate
- Certificate of Incorporation
- A valid means of identification (driving license (passport, driver's license, voter's ID)
- Address proof
- The details of the collateral that is provided (if there is any)
Commonly requested questions (FAQs)
What is the time frame to receive money via the Bank of Agriculture?
The duration of the application process differs based on the specific credit facility that you're applying for and the amount of money you require. The more amounts involved --, the longer it can take to secure the loan.
What is the time frame I must follow to repay a Bank of Agriculture loan?
It is the nature and character of your company, as well as the objective of the loan and the amount used to obtain it -- decide the repayment time. The typical loan tenors do not exceed five years.
Read also : CBN policy on bank charges.
What is the rate of interest that is charged for the Bank of Agriculture loan?
The rates of interest associated with loans issued by the BOA vary. The reason for this is based on the nature of the loan as well as the kind of business activity that you're engaged in.
Agriculture-related trading and marketing are generally rewarded with higher interest rates, as do agricultural production. Rates of interest between 12 and 14 percent are typical, though they can be less.
What is the maximum amount I can take out at the Bank of Agriculture?
The amount you can take out from the BOA is largely contingent on how big your business is as well as the credit facility that you apply for.
Most of the time, individuals are able to borrow much lower as compared to large companies. People may only have access to a couple of million dollars, but large corporations may be eligible for as much as one billion.
Is The Bank of Agriculture give grants?
The majority of the money lent by the BOA comes in loans. From time to time, it is possible that the Bank of Agriculture does give grants and also engages in capacity development. If you are who are looking for grants, it is recommended to contact the BOA.
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Is the need to be collateralized by the Bank of Agriculture require collateral?
The BOA requires collateral. Some institutions don't; however, the vast majority of them do. Acceptable collateral types include:
- The obligations of the Federal Government of Nigeria (FGN Bonds, FGN Eurobonds, FGN Treasury Bills, etc.)
- Obligations of state governments and institutions from the Federal Government of Nigeria
- Other non-government debt instruments
- Physical Assets, e.g., real property
- Third-party Guarantors (or collateral)
Apply : Bank of Agriculture website.