STERLING BANK NIGERIA AGRICULTURE SCHEMES

COMMERCIAL AGRICULTURAL CREDIT SCHEME

The scheme is aimed at fast tracking the development of the agricultural sector by providing credit facilities to large scale enterprises with a minimum asset size of N50m at a single digit interest rate of 9%. This is to enhance national food security, increase food supply and affect agricultural produce and product prices, thereby promoting low food inflation, reducing cost of credit in agricultural production and enabling farmers to exploit the potentials in the sector.

Target

• Medium scale Farms/Agric. Enterprise
• Corporate and Large scale Commercial Farms/Agric. Enterprise
• State Governments: For states to participate in on-lending to farmers’ cooperative societies and other areas of agricultural development

Specific Requirements

1. Medium scale Farms/Agric. Enterprise

It must be a limited liability company with an asset base of not less than N50million and having a prospect to grow the net asset to N150million in the next three years as well as full compliance with the provision of the Companies and Allied Matters Act (1990).

2. Corporate and Large scale Commercial Farms/Agric. Enterprise

It must be a limited liability company with an asset base of not less than N100 million and having a prospect to grow the net asset to N250million in the next three years as well as full compliance with the provision of the Company and Allied Matters Act (1990).

3. State Governments

State Governments/FCT could borrow up to N1.0billion for on-lending to farmers’ cooperative societies and other areas of agricultural development.

4. The State must submit an expression of interest

Applications for credit facility must be submitted along with a letter of application stating amount, purpose, repayment plan and execution of an Irrevocable Standing Payment Order(ISPO) [in favor of Central Bank of Nigeria and Sterling Bank] to deduct at source, the total monthly loan repayment obligation from the State Statutory Revenue on behalf of the Bank

5. State should have appropriate/functional structures on ground or set up structures for the deployment of funds, which must include existing and registered Cooperative Societies/Unions.
6. The cooperatives must be at least six (6) months old with proven track records of repayment. Clearly specify the areas/projects to which the funds would be deployed
7. The Cooperatives’ Societies and unions are to open their accounts with Sterling Bank Plc. for the purpose of the transaction

Other documentation/conditions as may be required by the Bank upon approval

• Maximum Credit: N2bn for Agricultural enterprises and N1bn for State Governments
• Interest rate: 9% inclusive of all charges
• Tenor: 3years inclusive of Moratorium (as at 2013)
• Equity Contribution: 30%
• Clear business plan
• Provide an up-to-date record on the business operation
• Have an out-growers program, where appropriate
• Insurance policy on all assets purchased noting Sterling Bank as loss payee beneficiary where assets are funded under the funds disbursed by the Bank’s nominated insurance company
• NAIC Agric. Insurance for production related products like Poultry, Crops and Livestock etc.
• Adequate and realizable collateral in line with the Bank’s CPG
• Disbursement Schedule
• Repayment Schedule
• Memorandum of Articles
• Certificate of Incorporation
• Cash flow of the project must be sufficient to liquidate the facility over its life time
• Satisfy all other requirements specified by the bank