I am writing this because I love you and your money. This might not be what you WANT to read but guarantee you that after reading to the end, you will come to the realization that this is the topic you NEED in your life as want to venture into commercial farming.
I am writing to discourage “I Wanna Be A Farmer” to desist from the idea of sourcing financial support from commercial banks or other loan shake money lenders in the name of investing in agriculture.
It is a bad idea.
Nobody will tell you this because it is a secret and only 1% of the 1% in our society got this essential information on time and in the right format.
Commercial banks are not ready to finance startup with business ideas, especial guys from Agric Sector, they prefer to invest in small business owners seeking additional capital.
Maybe your business plan of venturing into piggery production projected that in 2 years, you will make plenty of money to be able to pay back your loan and still have some money left.
But this where you get it wrong, in your Business Plan, those figures were imaginary numbers and no serious financial institution would love to risk their resources on your project.
For example, When I wanted to venture into commercial pig production, my business plan was attractive to all investors. Turning my farm into a multi-millionaire business was projected to be a deal of 3 years.
I was young and foolish.
The business plan was written by me, I wanted to start small with a minimum of 3 piglets (2 female, 1 male) and the startup capital was N300,000 only. I had no money, luckily, Angel investors who saw my article about the profitability of pig production on social media, funded the project.
In my business plan, I wanted to start with 3 piglets. But when the money came, I stocked the pen with 4 piglets. I purchased 3 female, 1 male they were good cross-breed of large white variety.
Making a minimum of N1,000,000 from sales of piglets was sure bet for me base on my business plan projection because the selling price of the piglet was N25,000 cash. And we believe that with 3 female pigs, in 4-5 months, we should have an average of 30 piglets in my pen.
So, if I sell all the 30 piglets at N25,000, my gross profit will be N25,000×30=N750,000. The figure was achievable because the demand for pork meat in my state was high, over 90% Benue State residence consume pork meat.
I did a proper market survey, selling of mature pigs wouldn’t be difficult, so I went ahead and launch my project. The outcome was 100% different from what my business plan figures reflected, after 6 months, my pigs couldn’t reproduce.
And due to Bad Management, the 4 pigs were poisoned outside the pen due to my worker negligence. Guys, I was frustrated and tire of life at the same time. Reporting back to my angel investor took time because I had no sufficient words to narrate the story.
Fast-forward, I am in a serious debt now, but we keep trying. We never give up as Farmers.
Today, I want to discourage you from seeking information about Agric Loan to START a farm, only seek for a loan to EXPAND an existing successful farm. For example, I have been into poultry business for over 6 years now though on a small scale it is a successful farm, my financial records can prove that.
The reason while I am against getting a loan to START a farm is simple. Farming is a serious business and it takes time to build a profitable business. I have lost a huge amount of money in Agriculture, so when I see beginners following the wrong part, I advise against it.
If you are a Nigerian reading this article, you already know that accessing loans in our country is hard. We have government agencies that suppose to finance Agro projects but they won’t give you the money, not because your business plan or idea is bad.
Start small with your savings and build.
“If you want money right now, starting a business is NOT something I will advise you to do. You need a job. A job that can pay you for your work at the end of the day or week or month” -Akin Alabi.
Do not invest in any agricultural business with a monthly pay mentality, it takes time and huge effort for any business to start paying you monthly, agriculture is not an exception.
Before collecting any Agric loan, make sure you already have an existing business. If you can access a loan, it should be long term business.
DO NOT GET A LOAN TO START A FARM, BUT TO EXPAND A FARM.