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Strategies of financing your agricultural enterprise

Well, financing has been one of the biggest huddles in farming. Below are some of the tips and solutions that you might use to curb the challenge.

  1. If you are employed, you could talk to your bank and secure a loan through your salary
  2. If you are a full time farmer, it will be ideal to pass your farming proceeds through your bank account, this creates a history which is important in determining your ability to pay and also your payment schedules. You can then secure a loan with a title deed or your tools and machinery.
  3. If you take your produce to a reknown marketer like NCPB, KTDA etc, then you can always secure financing through an arrangement between the bank and the marketer.
  4. Join a micro-finance or cooperative society. They usually have crop and animal loan products that you could acquire. Create a good relation for the sake of future borrowing.
  5. If you are confident that you will recover the capital, you could pitch your enterprise to a friend who can offer you the capital. You can involve a lawyer to assure him or her that she will get back the capital plus the interest after a certain period. This is a good strategy for repeat farmers, controlled farming and contract farmers.
  6. You could try to do contract farming. Banks usually finance LPOs.
  7. Approach Agricultural Finance Corporation (AFC) with your proposal. AFC is the farmers banker.

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