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Apr 30

A typical Nigeria farmer has problem accessing funds to either start or expand.



Most often, the people who gain access to funding are the big farmers who in most cases do not really need the money. A series of government initiatives has still not made any impact as the farmers who need the funds are less likely to access the funds.

Also, international finance organizations that have the funds and are willing to lend out upwards of $100,000 which is outside the interest of the small holder farmers and Agric SME's who make up the large percentage of the Nigerian farmers.

How do we make funding accessible and affordable to the majority of farmers???

We will love to read your opinions and any experience you may have .

#senceagricforum #senceagricconversationsonagriculture #funding.


Sometimes ,getting the loan is not usually the problem but often times smallholder farmers don't usually pay back reason why most investors want to invest in big farms also considering the ROI for them.

Smallholder farmers must cultivate the habit of paying back loan no matter how small.

A good percentage of small holder farmers will like to pay back loan especially when promised another loan after the return of one. But there are a lot of challenges faced during the production process.

Challenges that even experiencers farmers will not see coming.

This leads continuous loss. Lucky ones will just break even.


@temitayoyode farmers should be reliable enough by paying back what they owe when they should.

First, we've the policies & well drafted plans in place but they are not being acted upon as a result of greed, avarice, corruption & the likes. implementation and action solves this issue.


Secondly, the ROI for small scale farmers are low, hence the difficulty in paying back the capital. Hence the interest rate should be removed & payments options should be flexible. Farmers should be able to pay back with output which worth the capital sum loaned.


Third, small scale farmers do divert such loans obtained for weddings, parties and other activities that yields no income. This can be curbed by having agencies in place to monitor the farmers activities whilst having the fund released bit by bit.


Furthermore, government should ensure they have the proper channels & methods that can be used to recover loaned money which are usually left unpaid by defaulters.


Lastly, Farmer's should be supported with the technical know-how, proper monitoring and adequate distribution of such allocations, trainings & devising several

ways of recovering loans.




Hello mr Olawale, how can payment options be made more flexible compared to the current payment plan.

Also, what are the proper channels and methods you think can be used for recovering loans?

Lastly, we believe that farmers who are not confident about their return on investment should not apply for loans.

ROI for small scale farmers are low, hence the difficulty in paying back the loans. I would suggest loans given to small scale farmers should not always be in form capital, farm resources can also be loaned for a specific percentage in the farm output at the end of the farming season. This will help and encourage more small scale farmers into accessing loans to improve the situation of their farm.

We agree with you on your stance that loans should be given out in form of variable farm inputs only.

Also, we do agree with your idea of repayment of loans in form of farm output because it is flexible and easy to implement for both parties.

Firstly, it's not advisable for any start up to go for bank loan as there is no single digit interest loan.

Secondly lack of database is one major problem in startups, investors need number to convince them on ROI with our data we know where their is problem and other challenges.

Thirdly, startups can come in clusters and setup an integrated Farms.


Mr Bashir, we agree with all your points. However,how do smallholder farmers get trained to be able to prepare accurate farm records considering the illiteracy level of small holder farmers in Nigeria?

@senceagric for example when people started using phone, majority don't know how to operate and some even advertised vacancy for phone operator but with time this same set of people now operate android phones, that is a program through indegenious knowledge that will contrast their indegenious output to modern output should be introduced, as they will say seeing is believing. Am sure with time even the set of laggard will adopt the data collection and more so they have their data only that it's not documented.

One of the major reason why access to loan facilities is difficult for small holder farmers in Nigeria is their ROI. Before giving out a loan, the financier would want to make sure that he is getting a good enough return on his investment, but small farm holders that barely break even. Unforeseen circumstances affects small holder farmers more than the established ones and this makes it difficult for them to pay back loans even when given. My suggestion is that small farm holders should come together to create a larger Enterprise, this way, their production capacity is increased and so is their return on investment. Also, adequate market should be put in place for their products before embarking on production.

Excellent point you have made. The ROI will always be an issue and like many people have pointed out small holder farmer are at a major disadvantage. The point you have made about coming together as a group is great ad we already have cooperatives. The question is how successful have cooperative been at accessing loans? Do we know any group that has become successful at accessing loans and paying it back?

Giving and receiving loans involves risk. There are factors, unexpected mostly, that leads to complications. Hence, even with the suggestions made above, there's still risk. We can only try to reduce it to the possible minimum. Since the major reason governments and investors shun small scale farmers is because of the high risk. So how do we reduce the risk?


I think more small scale farmers friendly policies should be made. Policies that focuses more on empowering the small scale farmers who make up a rather significant percentage of the nation's farmers. It could come under poverty alleviation or even national development agendas. The government must be willing to take risks.


Also, I think education of farmers is very important. Many of them don't really know how all this loans and grants stuff work. Therefore, they flounder in their returns. Agriculture extensionists should also include training on how getting and returning loans work in their programmes. The media can also be used to sensitize and motivate farmers on loans. This will encourage them to try to come for it and also, having knowledge of its workings, they would more likely ensure returns.


Finally, it is important to realize that risks cannot be totally eradicated. Human nature and psychology play an important role in these matters. And they can be unpredictable, even to the greatest shrinks. So I think risk evaluation should be given special attention. Understanding of the risks involved would open more ways to reducing or avoiding the risks, and as a result, improve the loaning culture between farmers and government/investors.

Fantastic points. Well done. We agree with the points that have been made on educating the farmers. Not all farmers will use borrowed money to marry a new wife (Lol) and educating them on the importance of repaying loans may be a way to go. Unfortunately, we do not have enough extension agents, but there must be other ways to achieve the same results. Thank you for your contributions.

These farmers are most times not aware of fund opportunities. Awareness is the key

The issue of funding in agriculture has posed serious challenges to development of agriculture in Nigeria no doubt. But i believe if there can be an holistic approach to the problem then we may have headways. In the sense that looking at agricultural operations be it livestock or animal production majority of what is required are inputs instead of provision of capital fund to smallholder farmers i will sugest priv-govt should provide all neccessary input as grants or loan these will not only boost farmers productivity but also curb the issue of farmers diversion of loans for other purposes..

secondly financial institution should stop viewing agric investment like other form of investment e. g oil and gas,mortgage,real estate as these are investment with high ROI and can be quickly liquidated but rather agric should be seen as a social investment (with multiplying effect on the economy) that are subject to high risk and uncertainties that make agric take a while before the ROI are even made.

therefore, if financial instituition can see agric in this light, then their agricultural fund/loan/grants policies will be reviewed for the interest of the smallholder farmer whose major aim is just to get enough to feed himself and his family with some little savings..

Thank you for speaking our mind. Agriculture investment, especially to small holder farmers is a social investment and must be seen as such. Unfortunately our banks do not understand this yet.

I want to support the idea of awareness, but specifically awareness on how they can cooperative access credit facilities.

Another thing is that the bureaucracy of the Ministries of Agriculture across the country can not help to change the status quo of inaccessibility to national credit facilities. We need agriculturist at the helms of affairs and not agro- politicians.

Our current minister is supposed to be an agriculturist. From the information that was circulated, he is a farmer and so should be able to do better.

Lovely ideas. I am still learning. I agree with most of what have been said.

There should be:

Price control: because it is only went profit is made, you can think of paying back loan.

Readily available market with storage facilities (infrastructures).

Proper mitigation of risk.

May 15

Nice topic. Thanks for bringing this up..

Well, it's quite true that the big farmers are the ones having access to funding but a critical look into the so called "big farmers" will tell you why they enjoy the facility. 1 they keep proper recor and data. 2 they are well structured and regulated 3. They Ave a good forecast 4. They are enlightened n risk takers 5. They are conscious of the fact that debt is cheaper than equity. Etc. All these are some of the factors the funding agencies look out for before giving it out. And these are things most peasant farmers lack. To discuss the topic at hand, I will split it into two 1. how to access it: peasant farmers can access funds primarily through cooperative. They should form a corporative society such that they can access loans at a very cheap rate. They should keep record of their day-day activities. Extension workers also have a big role to play to get this mission accomplished.(through sensitization and awareness). How can the funding be affordable? The truth of the matter is banks prefer to give farmers loan compared to those in oil n gas. CBN and BOA are trying their best .. They give out loans to farmers at a single interest rate of 9% example is the commercial Agriculture credit scheme (CACS loan) I'll like you guys to read about it, we've NIRSAL loan, BOA Loan etc. All these loans and or funding can be granted only if the peasant farmers form a corporative, keep proper record n reading the guidelines (extension workers) to knw the conditions preceedent to draw down. I believe these would help them access affordable funding to propel thir bine o the next level


Agriculture and Food is very important. The Agricultural sector should b taken very serious to mostly small holders farmers especially those in the rural areas. Provision of loans, lands, equipments and building of agro-allied industries to support agriculture. This will help to enhance funding in small scale farming in Nigeria.

Many farmers want to take loans but credit worthiness requirements like collateral and others are out of reach of such farmers & then the process and administrative bottlenecks are tiring and discouraging. Its one thing for funds to be available and an entirely different thing for them to be accessible. The funds for agriculture in Nigeria, if the bulk of farmers must be carried along must beyond available be accessible and easily so.