Farming in Nigeria is now made easy because government has discovered that farming holds the potential to decongest the labour market because it is labour intensive and so employs much hands thus reducing the number of those in the labour market.
PROCEDURE TO OBTAIN LOAN/GRANTS FOR FARMING
The easiest way to obtain loan/grant is to start the venture you are interested in first and expand on the venture when the fund arrives. Starting helps the fund administrator to clearly get what you want to do and see that you already have the expertise on the job. It is a lot easier for a fund administrator to take risk by giving you funds when he has seen what you are doing instead of you presenting you plan on paper. I am not saying businesses on idea stage lack capacity to raise funds all I have said is that it will be a lot easier to get funds when you are already on ground.
There are so many factors to consider while starting and planning on going big while you don’t have all the needed funds. It is far cheaper to lease equipment you need for the business inclusive of farm land while you can buy same later from the loan you obtained or from your funds over time instead of investing scarce capital in buying equipment you can lease while you are starting. The benefit of leasing is much noticed especially where a venture fails after initial start. The cost implication to the entrepreneur is not much and he can move on with lessons learned without losing all his capital.
FACTORS CONSIDERED BY LOAN/GRANT AGENCIES
EXPERIENCE
Knowledge of the business proposed is key to obtaining loans/grants and the easiest way to demonstrate this know how is to have started, no matter how small. It is easier for people to fund you when they see that you have capacity to replicate what you are already doing, so don’t fold your hands and wait to start your venture in thirty [30] hectares if you can start it in just an acre that is not even purchased but leased
RECORD KEEPING
Another important thing to loan/grant administrators are record keeping this is why existing business that is managed well is always in a better position to secure additional funding before one that is still in idea stage. So it is essential that when you have started small that you keep record of everything happening in the venture. It gives the loan/grant administrator a sense of what your capacity to manage the subsequent business that will emerge with the loan/grant but where record keeping is non-existent it shows first hand that you don’t have capacity to manage resources even if you know about the business. Most times loan/ grant applicants are turned down because of lack of capacity after they have demonstrated that they have sufficient knowledge of the business.
ACCESSIBILITY OF THE SITE
Even though it does not matter where your business is located but if you are starting small especially where you are constrained by funds it is essential you are strategically position so that you don’t spend all your funds on logistics. So on this score where you are located becomes important. It is also important depending on the type of venture you are embarking on. Take for instance if you are farming vegetables for export it is essential that you consider factors like access to the airport. For instance if you farm where you will be held up for more than 10 hours before you get to the airport it means your produce will not retain its freshness and this is essential to most importers. It is important to the loan/grant administrator that you show mastery of your business.
This will give the administrator the needed comfort to approve your loan/grant request. Careful planning is key to business and this is why you need to discuss your business plan with professionals because most entrepreneur will think that daily expenditure is inconsequential meanwhile if such is much it destroys the profitability of the business. Imagine a scenario where a farmer buys or leases land in a very distance land where he thinks the cost is cheaper meanwhile his daily logistics cost to the farms overtime cost so much more he would have spent if he had leased land from a nearer place but because he grossed over this cost and did not take due notice of it he subsequently discovers this after he has expended money on the land leased in the far place.
DURATION OF THE BUSINESS
This is the length of time it takes a business to start yielding income. If you are involved in just farming depending on what you are farming your time maybe very long or not so long but if you are also into processing even if it is at the micro level it helps to reduce your waiting time. Processing also yields more profits than just real farming so you will do better if you incorporate a bit of processing in your farm work don’t just use off takers.
Loan/grant administrators will be better convinced if they see that you have planned in this direction this will show mastery of the business terrain and will help convince them to release the funds that you seek. If you engage in processing it means that your gestation period will be shorter than those involved in just farming even though this may not happen at the beginning but overtime. Take for instance a pig farmer who is just into rearing of pigs and one who goes further to process the pigs upon maturity. The difference will show so much in the bottom line and the processor once he starts can buy from others to process thus he will have more turnover than just a pig farmer.
There are other ideas that we can discuss during session that will help you to easily get the financial support you seek. We will also provide list of available agencies both local and foreign that give these grants/ loans. All you need do is contact us today so you can be properly guided.