Farmers especially (peasant
farmers) cannot generate enough capital from their savings to finance their
farm business therefore there is need to source for fund/capital
Money can be secured internally by:
i. Personal savings.
ii. Sales of farmer/farm’s asset.
iii. Gifts.
SOURCES
OF FARM FINANCING.
WAYS OF GENERATING CAPITAL FOR AGRICULTURAL INVESTMENT
WAYS OF GENERATING CAPITAL FOR AGRICULTURAL INVESTMENT
Capital or money can
be secured for agricultural investment in two ways:
1.
External Generation
of Capital:
This is a situation whereby capital is generated for agricultural investment
from outside (not from the farmer’s account).
2.
Borrowing: This means taking
money on loan with the understanding that it will be returned as agreed upon at
an appointed time.
Money/capital could be from any of these agencies.
Money/capital could be from any of these agencies.
i.
Co-operative
society
ii.
Commercial
banks e.g. First bank of Nigeria, Union Bank, StanbicIBTC Bank, GT bank, Polaris bank, Zenith Bank, Kuda Bank e.t.c
iii.
Agricultural
banks e.g. National Agricultural and
Rural Development Bank
iv.
Micro-finance
banks and Institutes e.g. Nirsal MFB, SEAP Microfinance, http://nmfb.com.ng/ LAPO and other microfinance or micro credit lenders, All ht e above have longer history of operations, all registered, but understand their better concepts too.
v. Reasonable
Money
Lenders
vi.
Friends
and relatives
vii. Government
approved agencies such as National directorate of employment (NDE, SMEDAN) Fadama
project, rice project etc.
Internal generation
of capital:This is a situation whereby the farmer generates the fund or money to finance
his agricultural business without going outside to borrow. Money can be secured internally by:
i. Personal savings.
ii. Sales of farmer/farm’s asset.
iii. Gifts.
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