7 Simple Ways Of Generating Capital For Agricultural Investment

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

SOURCES OF FARM FINANCING.
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.

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.