Bank of Agriculture, Nigeria’s foremost agricultural and rural development finance Institution, is inviting suitable and qualified established and budding agricultural machinery “service for free” providers to apply for financing under Its Agricultural Machinery Finance Programme, in form of proposals for the expansion and/or establishment of commercial mechanization and field engineering services along all stages of the agriculture value chains, complete with feasibility studies, market surveys and business plans.
As part of the Bank’s strategy to create a viable and sustainable financing system for supporting mechanization and field engineering services, as well as acquisition and installation of value chain infrastructure at all stages of the agriculture value chain, BOA has put in place a comprehensive financing Programme Fund in tandem with CBN/NIRSAL’s Mechanization Financing Credit Risk Guarantee Terms. Under this Programme, potential borrowers may express interest to benefit from the Fund, and on meeting all the requisite conditions, enter into financing agreement with the Bank.
The first set of proposals/expressions of interest shall be submitted and processed at the Bank’s head office in Kaduna, but subsequent applications shall be decentralized to zones and branches.
Indicative Terms Sheet Highlights
The following are highlights of the indicative Terms Sheet under this Financing Programme:
- Eligibility: Individuals and corporate entities are all eligible borrowers under the programme
- Loan Duration: 24 to 48 months
- Loan Type: Term loan (capital equipment) to borrower
- Interest Rate: Loan volume dependent (12% - 14% per annum, and exclusive of other applicable fees)
- Loan Purpose: To finance the purchase of tractors arid ancillary equipment (such as harrows, ploughs etc., as well as hand-held tools, storage/preservation and processing machinery)
- Target Borrower: Commercial Service Providers along the agricultural value chains who maintain fleets/ranges of machinery and equipment for providing services.
- Borrower Categories: Category 1: Entrepreneurs, Co-ops/Farmer Groups rd Agribusiness
Category 2: SMEs (growth companies)
Category 3: Large corporates
- Borrower Equity Contribution: 10% of loan value, and under exceptional circumstances, additional equity (of up to maximum of 20%)
- NIRSAL Credit Risk Guarantee: 75% of outstanding principal and interest
Other indicative conditions to be made available on submission of expression of interest
16th October, 2012.
Method of Application:
Interested applicants are required to forward a soft copy of their proposal in pdf format to firstname.lastname@example.org
and two (2) hard copies to the undersigned. The proposal may, at the minimum, include:
- Location of a service provider’s current or proposed activities
- Details of an active service provider’s turn over in the last three years (or as may be applicable)
- Detailed schedule of service providers’ fleet or range of machinery and/or equipment (if applicable)
- Service provider’s business plan, including a section on market demand/viability for services in chosen location. Any contractual arrangement for provision of services may also be included
- Brief bios of the management and other key staff of the service provider’s company, who would be involved in operating and managing all aspects of services
- Evidence of any alliances/partnerships/relationships with other agricultural mechanization/field engineering service providers and/or technical services providers for the purposes of ensuring optimum serviceability of machinery and equipment
- Service provider’s company incorporation details, including a copy of the Certificate of Incorporation, Memorandum and Articles of Association and Form Co7
- Service provider’s company audited accounts for the past three years (where applicable)
- Service provider’s VAT registration certificate and evidence of past VAT remittance (where applicable)
- Service provider’s Bank references indicating the company’s financial capability