How to Get Federal Government Loans for Small Business in Nigeria

Businessmen, investors and farmers have reasons to smile as the government has put in place various ways to assist small and medium scale enterprises (SMEs). These come in the form of financial loans and grants that are accessible to those who meet the required conditions.

Every entrepreneur at one point or another will need funds for startup of business or expansion of an already existing one. To achieve this, the following should be put into serious consideration:

1. Prepare a Business Plan – No bank or financial institution will offer loans to its customers without asking for a bankable business plan. An entrepreneur, who really means business, must have prepared a workable and reliable guidelines for the intended business in order to receive positive response from banks. This is a necessary requirement as no bank will ever disburse loans to unserious entrepreneurs.
2. Belong to a Co-operative– There was a time government gave out loans to individuals, but this method did not succeed. Now government focuses on offering loans to cooperative groups such that are made up of farmers, producers, manufacturers, artisans and so on. Loan applicants should look for suitable cooperatives and join. Being a strong member enhances the chances of obtaining loans faster just like Zintego Invoicing Free App.

You will need to get out there and seek information about the numerous programs the federal government has initiated to empower and equip interested citizens for a better future. Graduate Internship Scheme (GIS) and Subsidy Reinvestment and Empowerment Program are few examples.

Apart from government loans, private firms also encourage growth of small businesses by giving out loans at specific times of the year or as economic situation demands. It is therefore advisable that interested individuals and groups be on the lookout for such opportunities.

There is also a current program called YouWin for those who are prepared and have well-articulated business plan.  Applicants must be between 18-40 years of age and must indicate Nigeria as their business location.

GOVERNMENT LOANS AND GRANTS IN NIGERIA.

Government is making concerted efforts to make agriculture more appealing to its citizens. Many graduates dislike farming and would prefer white-collar jobs. The Nigerian government has provided agricultural loans and grants so as to change this ugly mindset

To boost agriculture, many special government programs and schemes have been inaugurated and followed up for maximum success. This will greatly help individuals grow their businesses and contribute to the economy.

These programs and schemes have a wide coverage. Various aspects of agriculture are included in the scheme such as animal husbandry, crop production and so on. However, the task of disbursing loans has been given to specific agencies and institutions, namely:

1. CBN agricultural loan to farmers in Nigeria.
2. Bank of agriculture loan

1. CBN AGRICULTURAL LOAN

About 70 billion naira has been set aside by the federal government through the Central Bank of Nigeria to assist farmers. These agricultural loansby CBN come with very low interest rate, and are accessible to qualified and interested groups throughout the federation.

2. BANK OF AGRICULTURE (BOA) LOANS

This is a special bank established by the government to serve as the main channel through which agricultural loans and grants are released to members of the public.

To make this effective, government has conferred supervisory and controlling powers on the Federal Ministry of Agriculture and Rural Development. With this, BOA should be the first thing on the minds of prospective loan applicants.

REQUIREMENTS FOR BANK OF AGRICULTURE (BOA) LOANS

• You must open an account with BOA and run it for six months.
• You must fund your account with about 20% of your target loan.
• You must present collateral; land is not included.
• You must tender a well-designed business plan.

The above requirements are not meant to scare away interested applicants; these requirements are actually flexible. Detailed information on BOA can be found on their official website.

APART FROM THE BOA, THERE ARE OTHER MEANS OF ACQUIRING AGRICULTURAL LOANS

Farmers and cooperatives can approach commercial banks for agricultural loans. This was made possible through partnerships between the bank of agriculture, the bank of industries and numerous commercial banks such as UBA, Zenith Bank, Union Bank, Stanbic IBTC, and First Bank.

REQUIREMENTS FOR ACCESSING LOANS FROM COMMERCIAL BANKS

Loans are given to individuals and cooperatives for various purposes. Commercial banks have all it takes to finance small and large business ventures. Individuals and groups can obtain loans from commercial banks without any fear or doubts. Below are the requirements set by commercial banks:

• Functional account with the bank
• Loan application
• 10% deposit of the loan applied for
• Collateral
• Workable business plan

A visit to any of the designated commercial banks will furnish you with the needed information on how to secure agricultural loans.

3. AGRICULTURAL CO-OPERATIVE SOCIETIES

As has been mentioned earlier in this article, being part of a cooperative makes it easier for you to access loans and grants. Each member receives the amount proportional to his or her payment contributions as cooperative member.

Notable among these agricultural cooperatives are FADAMA, All Farmers Association of Nigeria (AFAN), and Youth Empowerment in Nigeria (YEAP).

It is easier and quicker to obtain loans under the umbrella of properly registered and well-recognized cooperative societies. Below are the simple requirements:

• Register under a recognized agricultural cooperative.
• Prepare a loan application letter with the logo of the cooperative and the signature of top executives of the cooperative.
• Carry out feasibility study on the intended business and forward it to the bank for processing of the loan applied for.

With the growing patronage from federal government, agriculture is coming to the forefront, and smart farmers are making use of the opportunities by accessing loans and enjoying the attendant benefits. It is not too late for interested individuals or groups to be part of this laudable program. You can take advantage of it too.

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