The agricultural sector remain Nigeria's biggest
joker in it drive to achieve economy sustainability. it is so funny that
Nigerians appetite for white-colar
related jobs keep pushing the agricultural sector into dark spot of neglect
and dearth.
Those who triggered their risk underestimated the
amount of resources, investment, training, market survey capital etc needed before going into the sector... they dip into the business with nothing but
hoe and cutlass.
My father is one of these people.
From a cucumber farmer whose 15 acres of arable
land (in Epe, Lagos State) has only four staffs and total of 4 plots
cultivation, to catfish farmer who intend to stock 20,000 juveniles and when
asked about his market target, his response being that “my egun (local Togo fish sellers) customers told me to contact them
when I am ready to sell”, show lack of seriousness on the part of these
investors whose plight has moved the federal government to create single-digit
loan.
it is as though there is total disrespect for the
sector and no seriousness to give government’s efforts a compliment.
In a recent event, the Group Managing Director of
United Bank for Africa (UBA), Kennedy Uzoka, Zenith Bank Group Managing
Director, Peter Amangbo, and Hassan Usman of Jaiz Bank Plc, said the government
of Nigeria decided to utilise CBN’s special reserved funds for lending to
agricultural and manufacturing sectors in other to hurriedly revamp the
economy.
This news, like many others are bringing more and
more farmers and would-be farmers to the doorsteps of many financial institutions
and 99% of these request are declined.
out of frausttration, words on the streets now is
that these announcements are lipservices, political repositioning, that
government do not have a genuine interest in empowering the sector.
While your agriculture facility request may have
been rejected is simply not because officials of these institutions, or
government have an ulterior motives for these funds but because before the
money is disbursed to you, indication has it that you will not be able to pay
back hence the rejection.
At this stage, it will be beneficial to you if what
is required from you is understood and adequately prepared for before you visit
the next financial institution with your proposal.
Note: common saying among bankers is that proposal
is a voodoo concoction prepared with pen and paper to command cash from bank's
vault.
Why your facility must have been
rejected
A. Feasibility
report
A feasibility study is an analysis of how
successfully a project can be completed, accounting for factors that affect it
such as economic, technological, legal and scheduling factors. Project
managers/banks use feasibility studies to determine potential positive and
negative outcomes of a project before investing a considerable amount of time
and money into it.
If you want to have a look into the future of your
intending business, feasibility report is your telescope.
Importance
Feasibility studies allow you to determine and organize
all of the necessary details to make a business work.
From your feasibility study, you can identify
logistical problems, and nearly all business-related problems, along with the
solutions to alleviate them. Feasibility
studies can also lead to the development of marketing strategies that convince
investors or a bank that investing in the business is a wise choice.
You cannot come to me for facility approval and
your market is not known… that, is my first NO for your facility.
Components of a Feasibility Study
Description – a layout of the business, the products and/or services to be offered
and how they will be delivered.
Market feasibility – describes the industry, the current and future
market potential, competition, sales estimations and prospective buyers.
Technical feasibility – lays out details on how a good or service will
be delivered, which includes transportation, business location, technology
needed, materials and labor.
Financial feasibility – a projection of the amount of funding or startup
capital needed, what sources of capital can and will be used, and what kind of
return can be expected on the investment.
Organizational feasibility – a definition of the corporate and legal structure
of the business; this may include information about the founders, their
professional background and the skills they possess necessary to get the
company off the ground and keep it operational.
Revert to this link http://smallbusiness.chron.com/write-feasibility-report-starting-small-scale-fish-farm-18254.html
on how to write a feasibility report.
B. Personal
finance or equity
Do you have a wonderful business idea that you
believe will change not just your fortune but that of the economy of your
environment?
And you are planning to approach a financial
institution for support?
Most common words I heard these days are:
“I need to implement this before someone else does”
"If I don’t do it now, the market will slow
down later”
“In 12 months ‘time, I will double whatever I
invest”
You can add your own line to the above ones my
friend… whatever push or however the rush in your vein to get it down and over with, I have a greater percentage feeling that
you are about taking a wrong step.
Forget the fact that we discussed about feasibility
report and because you can write better than me, a convincing 500 feasibility
page is ready with zero fund to back your magnificent
idea.
And yes! You also have a security just to show how
serious you are.
Tell me, what happen in the event of gain - We all
are happy, right?
And what happen when the case is opposite? - Don
Abiodun suddenly become a car dealer!
The funds in bank’s vault are safe in the vault but
vaults are not where these funds are meant for. While banks are on the lookout,
waiting for you and others to utilize these funds, they are equally watchful
and will decline your request when they see that your plan have holes in them.
Testing your claim that the business is worth
investing into is one way you can soundly convince investors and your money,
family contribution, friends and loved one's funds are some of the best way to
do this.
If your business is meant for a large market,
proving your skill on a small scale is a good way to know the market, know the
challenges, learn how to evade, romance, reduce risk, understand other
potentials/danger that is permanently present in all business will not only give
you credence but help build confidence in your investors.
In the absent of these, some will say “God won’t allow my business to witness
problem(s)”.
And in my mind, I magnanimous reply “God will not allow me to approve this request.”
C. Have
Track Record
There cannot be history without event and there
cannot be sales record without previous business activities.
If you are bold enough to put your fund to test and
show the world that this business is worth investing into, take that extra pain
in keeping sales record. The last article, click here
detailed sites where you can get help with sales record software etc.
Sales record gives credibility to your business.
Record entails keeping of income and expenditure as
well as vendors, contacts etc. giving investors full auditing power.
D. Get
trained
The most needed training in the agricultural sector
today is business/managerial training. For many who grew up on their parent’s
farm, going back to a trade ‘I was born
in’ need no former schooling hence, we see Mr A, having just retired from
the state ministry, decided to clear four acres of his land for vegetable
farming.
During a site visitation for a LSETF beneficiary in
Lagos, I traced Mr X to Tejuosho road in the ever busy second hand clothes
market of Yaba.
We got talking and Mr X rapt me with how he want to
start garri production (Garri is a popular West African food made from
cassava tubers) as the commodity which need little or no advert will feed
millions, ready market, around his location.
looking at the situation, the nearest farm
settlement to Yaba is, at least, 50 kilometres away. Mr X resides on the 3rd
floor of a densely populated building. When asked where the grinding machine
(wight about 100kg) will be located, Mr X took our team to the topmost floor of
his building (4th floor).
Aside from the heavy machine vibration (potential
danger) taking toll on the house thereby putting occupants at risk,
transporting raw materials to the location (high cost of transportation) will
eat unnecessary deep into the fund he requested for.
Of course, Mr X request was declined, not only
because of the above mentioned reasons, others holes were identified and rather
than just declined his request, he got over one hour consultation from us on
what to put in place, location of farm/factory etc free before we left.
Today, both private and government institutions are
availing citizen rigorous agricultural education and leading among them is Leventis Foundation Agricultural Training School, LAGOS STATE AGRICULTURAL DEVELOPMENT AUTHORITY where you get drilled and baked ready for your next agric business move.
SUMMARY
Much as you await to know about the different
single-digit loan scheme in Nigeria and all the secrets of getting your request
approved, it will be a good thing to get your house in order so as no to be
discourage by investors ‘rejections.
No investor will give your plan a nod if the risk
appetite points negative.
It is good to know that if the well planned
businesses (approved by these same institutions) still go into turbulence, what
then do you think they (investors) will make of yours that is not well
understood?
It is my pleasure to know that more and more are getting needed help via this site. Your emails, inbox sms remain best rewards for this works.
You can get across to Don Abiodun Odedeyi via any of these channels:
Linkedin: Adiodun Odedeyi
email: abiodunodedeyi@gmail.com
facebook: Don Abiodun Odedeyi
Instagram @donabiodun
twitter: @donabiodun
email: abiodunodedeyi@gmail.com
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Instagram @donabiodun
twitter: @donabiodun
Reference
I got helped while writing this article and I will like to
say “thank you” to the following:
University of Lagos Digital Library, Lagos Nigeria
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