Bank of Agriculture (BOA) is a government-backed bank that provides
credit to farmers and other agricultural enterprises.
Bank of Agriculture responsibilities include:
• Loans to support agricultural activities along the value chain;
• Granting of non-agricultural microcredits.
• Mobilization of savings
• Consolidation of agricultural capacity;
BOA is Nigeria's leading agricultural bank with over 201 national
branches, six regional offices and headquarters in Kaduna. BOA partners with
several Development Finance Institutions (DFIs), including the Bank of Industry
(BOI), Central Bank of Nigeria (CBN) and Development Bank of Nigeria (DBN).
Funding and Types of Loans Available Through the Bank of Agriculture
Agro-Processing Facility
The BOA Agricultural and Industrial Complex offers financing for the
establishment of agricultural products processing enterprises in the rural or
urban environment. Agro-industrial processing is an important part of the
agricultural value chain. Through this facility, BOA aims to ensure national
food security and reduce post-harvest losses.
Direct Credit Product
This facility was developed by BOA to finance agricultural production and
other agriculture-related activities. This facility can be used by both
individuals and businesses. Individuals can borrow up to 5 million won, and
corporations can borrow up to 50 million won.
In both cases, the duration of the loan does not exceed 5 years. An
interest rate of 14% applies to agricultural production and processing of
agricultural products. All product marketing loans are subject to an interest
rate of 20%.
Equipment Leasing Product (ELP)
Through its equipment rental product, BOA seeks to increase productivity
by offering Nigerian agricultural companies the opportunity to mechanize parts
of their processes.
Increasing the productivity of your farm can help you increase
production, meet domestic demand and leave a surplus for export. Mechanized
equipment also helps improve the quality of manufactured products, making
Nigerian products more attractive to foreign buyers.
If you want to improve your agricultural production, you can rent almost
any type of machinery.
Export Finance Facility
The BOA Export Finance Facility aims to encourage agricultural exports,
bringing valuable foreign exchange to Nigeria. The plan is also believed to
create jobs and bring prosperity. This is a short-term credit scheme where BOA
can offer both pre-shipment credits and post-shipment invoice discounts.
Export financing enables Nigerian exporters to make sales that would not
otherwise be possible. Up to 70% of a verified export purchase contract can be
financed in the pre-shipment period. During the post-delivery period, you can
get up to 70% discount on your export earnings. Discounts are granted on the
basis of a confirmed letter of credit (issued by the foreign importer).
Grow and Earn More (GEM)
The GEM credit scheme was developed as a tool to attract more Nigerian
women into the agricultural sector. Beneficiaries are expected to be
small-scale farmers with the necessary land to grow or produce products in the
agricultural value chain.
You do not need to provide this form. Instead, look for a guarantor. You
can borrow up to 1 million won at 12% interest.
Haulage Credit Facility
This Agricultural Bank product is designed to support companies involved
in the transportation of agricultural products. Businesses can use this loan to
purchase trailers, trucks and related vehicles.
Hides and Skin Revival Credit Facility
Bank of Agriculture Loan Program provides investors with
access to funds that can be used to develop skin and leather businesses along
the market value chain. One of the objectives of the plan is to increase
Nigeria's foreign exchange earnings through raw hide exports.
Input Procurement Credit Facility
The credit scheme for the purchase of inputs aims to help companies
finance the purchase of raw materials for agricultural production along the
value chain. Eligible business activities include those related to the purchase
of planters, the supply of seeds to Nigerian farmers and the
importation/production of fertilizers.
Inventory Credit Facility
BOA provides loans to farmers for income-generating activities during the
dry season (post-harvest) through stock credit. Recovered products are stored
in stores or warehouses and used as collateral for loans. Stored items are
insured. This enables the financing of projects with a short execution cycle.
Large Credit Product
This feature of the large loan product is only available to large
corporations. Businesses engaged in agriculture or other agriculture-related
businesses can obtain loans.
It can be extended to a minimum of 50 million won and a maximum of 10
million won. Payments can be made over a period of up to 5 years. The
applicable interest rate is 14% for agricultural production and 20% for
marketing or trading activities.
Ranching Development Credit Facility
BOA aims to support national food security programs through the Farm
Development Loan Facility. The introduction of this credit facility will allow
companies to invest in the creation of farms throughout the country. This will
help Nigeria raise cattle and sheep.
Sugar Revival Credit Facility
In an effort to increase local sugar production, the federal government
of Nigeria developed a plan called the Nigeria Sugar Master Plan. BOA is
working with the National Sugar Development Board to implement this program.
Funding under this scheme is available to all companies in the sugar
value chain. In addition, both individuals and commercial organizations have
the right to raise funds.
Youth Agricultural Revolution in Nigeria (YARN)
The YARN credit facility was established to encourage youth participation
in the agricultural sector in Nigeria. You can borrow up to N1 million at an
interest rate of 12%.
This contract does not require guarantees, but a personal guarantor is
required. Beneficiaries must be smallholder farmers covered by the Nigeria Risk
Sharing for Agricultural Lending (NIRSAL) guidelines.
Qualifying for a Bank of Agriculture Loan
Businesses that carry out production activities related to agriculture
can receive loans from Banca Agricola. BOA generally does not finance
individuals for most of the loan opportunities they offer. So, if your company
is not already registered with the Corporate Affairs Commission (CAC), you will
need to do so first.
Unlike other development financing institutions (BOA, CBN, DBN), Banca
Agricultura offers credit directly to end consumers. To access a loan, you may
need to open an account with BOA at one of several branches in the country.
How to Apply for a Bank of Agriculture Loan
If your company is interested in obtaining a BOA loan, you can visit the
nearest Bank of Agriculture branch or outlet. You can indicate in the office
that you want to apply for a loan.
Before submitting your application, you may be asked which credit
facilities (listed above) are of particular interest to you.
If you are unsure, BOA staff can help you apply to an organization that
meets your needs.
You must evaluate the purpose of the loan and its suitability for your
business.
If you are satisfied with the results of the evaluation, you will be
pre-approved for a loan.
Generally, full approval is subject to certain conditions/requirements
outlined in the pre-approval letter.
BOA loan requirements vary based on factors such as the loan amount
requested and the size of your business. That said, there are some standard
documents you should always submit, including a business plan, loan statement,
financial statements and tax returns.
A Checklist Required Before a Loan is Approved may Include:
• Completed application form
• Company Profile
• Business plan
• Cash flow budgeting.
• Bank statements (12 Months)
• Audited financial reports
• Fiscal reporting
• Certificate of establishment
• Identification (Driver's License, Passport, Voter's Card)
• Address verification
• Details of the guarantees provided (if any)
Frequently Asked Questions (FAQs)
How long will it take before receiving funds from the Bank of Agriculture?
The length of the application process varies depending on the specific
loan facility and the amount of financing required. Usually, the larger the
amount involved, the longer the loan term.
How long do I have to pay back a Bank of Agriculture Loan?
The nature of your business, the purpose of the loan and the type of loan
you are applying for will determine the repayment period. The term of the loan
usually does not exceed five years.
What is the Interest Rate on Bank of Agriculture Loan?
Interest rates vary by BOA loan. This depends on the purpose of the loan
and the type of business you are running. Marketing and trading activities in
agriculture generally involve higher interest rates than agricultural production
activities. Interest rates are usually around 12-14%, but can be lower.
How Much Loan can I Get from Bank of Agriculture?
The amount you can borrow from a BOA depends on the size of your
organization and the loan facility you are applying for. Individuals can
usually borrow much smaller amounts than large corporations. Individuals may
receive only a few million dollars, but large corporations may receive up to a
billion dollars.
Does the Bank of Agriculture give grants?
The majority of financing provided by BOA consists of loans. However,
agricultural banks sometimes provide subsidies and engage in capacity building.
Those seeking a grant are advised to contact BOA directly.
Does the Bank of Agriculture require collateral?
Yes, BOA generally requires trust. There are a few entities that don't,
but the vast majority do.
Appropriate forms of insurance include:
• Federal Government of Nigeria Bonds (FGN Bonds, FGN Euro Bonds, FGN
Treasury Bonds, etc.)
• Obligations of state governments or agencies of the Federal Government
of Nigeria;
• Other government bond products
• Physical goods, e.g. property
• Third-party guarantor (or guarantee)
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