Agriculture aside from oil is the second-largest industry and a major source of foreign exchange for Nigeria. In the wake of the pandemic and an economic downturn, agriculture is part of the few sectors that thrive in difficulties. It is, for this reason, the interest in agro-based ventures is increasing in many individuals.
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Nigeria is one of the most populous countries in the world and home to millions of people. There is a need for a viable farming system that can help cater for the number of people who are residents of the country. Unfortunately, the ratio between the number of food produced and available consumers is uneven; there are not so many agricultural enterprises to help solve the problem.
African Development Bank
The AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC). The primary function of AfDB is making loans and equity investments for the socio-economic advancement of the RMC. Secondly, the bank provides technical assistance for development projects and programs. Thirdly, it promotes the investment of both public and private capital for development. Fourthly, the bank assists in organising the development policies of RMCs.
Commercial banks help the large agricultural sector in Nigeria in a number of ways. They provide loans to traders in agricultural commodities. They open a network of branches in rural areas to provide agricultural credit. The commercial banks only require collaterals to back up loan applications. In fact, the banks are more often than not, the first option for capital in starting an agro-based venture. However, the chances of loan approval can be very slim compared to that of other financial institutions.
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The World Bank focuses on developing and implementing agriculture finance strategies and instruments to the popular private sector. It is aimed at enhancing access to suitable financial services to farmers – particularly smallholders – and agricultural Small and Medium Enterprises (SMEs).
Bank of Agriculture (BOA)
The BOA (Bank of Agriculture) is a development finance institution focused on providing loan credit facilities in agriculture. The Bank is wholly owned by the Federal Government of Nigeria. It is required to provide credit to support all activities in the Agricultural Value Chain in Nigeria. Although it also has a secondary mandate to provide microfinance services.
The agricultural loan the BOA provides is for financing small, medium and large-scale agribusiness projects across the agriculture value chain. It provides a great alternative for individuals looking for business loans to fund their startups. Individuals can access credit facilities up to a maximum of N5,000,000 particularly for agricultural projects.
Nigerian Agricultural Cooperative And Rural Development Bank
The Bank is a Development Finance Institution wholly owned by the Federal Government of Nigeria. They provide finance and credit facilities to agricultural and agro-allied industries, loans to agricultural institutions, organisations and, especially for cooperative societies.
Compared to other sectors, the agricultural sector seems to be one the major industries that have had the undivided focus from both private and public institutions, not excluding the more favourable policies of the government. When it comes to agriculture, capital is not an issue.
Featured Image Source: The Guardian NG
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