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How to Apply For Federal Government Loan

Loans can also be gotten from the federal government too as much as they are gotten from financial institutions. The federal government offers loans mainly for small to medium businesses. This is because these small and medium businesses contribute a lot to the growth of the country’s economy plus, they are the most populated kind of business.

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Just like most financial institutions, federal government loans are also targeted at different loan needs and initiatives. The federal government loans can be accessed through the many government-backed agencies or organizations that always offer competitive interest rates and a flexible repayment schedule.

History of Federal Government Loan

The Federal Government loaning scheme started over a decade ago. The federal government loan comprises many organizations and agencies offering loans in their specialty. Those organizations and agencies were founded in different years which creates a variation in the history of the federal government loan scheme.

For instance, The Agricultural Credit Guarantee Scheme Fund (ACGSF) was launched by Decree No. 20 of 1977 and started giving out loans in April 1978. The Nigerian Students Loans Board was launched in 1972, and between 1973 and 1991, the Nigerian Students Loans Board has already disbursed about 46 million naira worth of loans.

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Why you need a loan

The federal government loans are aimed at people who want to build something or further a career. This means that the federal government loans will only be disbursed to people whom the organizations or agencies think will make use of the loan for the betterment of the nation. Or the loans will be disbursed to people who they trust have the capacity to foot the repayment.

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In this light, people who need loans from the federal government will be mostly people who have a small to medium-sized business or are pursuing a career in school but have no money for tuition.

Types of loan programs offered

There are tons of loan programs offered by the federal government through the many government-backed organizations and agencies. Most of the organizations or agencies only target a particular type of business or loan need e.g Agriculture, student loan, industry, importation and exportation, etc.

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1.  Bank of Agriculture (BOA)

The Bank of Agriculture (BOA) is an arm of the federal government loan scheme that focuses on providing loans for both small and medium businesses in the agriculture sector. They offer a wide range of loans for agricultural purposes but they do support only 2 non-agriculture loans; the BOARBI Model and the micro-credit.

The interest annual rate ranges from 12% – 14% and the maximum tenor goes up to 5 years. The loan amount ranges from 20,000 naira up to 5 million naira for small businesses or sole proprietors. Loans higher than 5 million naira are only reserved for corporate bodies and require more paperwork.

The agric loans offered by the Bank of Agriculture (BOA) include the following:

Direct Credit Product Large Credit Product Youth Agricultural Revolution In Nigeria (YARN) Grow And Earn More (GEM) On-Lending Credit ProductInput Procurement Credit Facility Collaboration Mechanization Service Provider Operators Storage Component of the Agricultural Value Chain Agro-Processing Facility Haulage Credit Facility Sugar Revival Credit Facility Ranching Development Credit Facility Hides and Skin Revival Credit Facility Export Finance Facility Cooperative Family Feeding Programme (CFFP) Equipment Leasing Product (ELP)

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And the non-agriculture loans offered by the Bank of Agriculture (BOA) are:

Requirement for Applying
An account with the bankValid ID2 guarantorsTax clearanceAn audited statement of accountConsent to a mortgage of the landed property (application to some of the loans)

How to Apply

All applications and processes will be done at a branch of the Bank of Agriculture (BOA) before you can have access to their range of loans.

2.   Bank of Industry (BOI)

The Bank of Industry (BOI) offers a wide range of loans targeted at large, medium, and small registered businesses. These businesses can be of any sector like agriculture, energy, entertainment, chemicals and paints, hairdressing, woodwork, etc.

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