How to secure an Agricultural loan through the Bank of Agriculture


How to secure an Agricultural loan through the Bank of Agriculture

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)

 This is the website of the Agricultural Bank:

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