Sources of Finanace for Agribusiness Enterprises in Nigeria

Abstract

Finance is a universal input-resource required in any venture including agribusiness enterprises. Agrientrepreneurs need funds to carry out farm operations, purchase inputs, expand scale of operations and improve on the levels of technology. One way of sourcing this fund is through personal savings; but since most farmers in Nigeria are resource-poor, they need external fund. Hence, the need for provision of credit facilities for the micro, small, medium and large scale producers, processors and marketers of agricultural products. This paper, therefore, reviewed the various sources currently available for funding agribusiness enterprises in Nigeria and the demerits of each source. The paper found that financing agribusiness enterprises can be either from non-credit or credit sources. The noncredit sources comprise of personal savings of the entrepreneur and grants while the credit sources include noninstitutional and institutional sources. The institutional sources are the bank financial institutions such as commercial, merchant and development banks and non-bank financial institutions; while the non-institutional sources included friends/relatives, professional money lenders and cooperatives.However, as no single source can be effective at all times, a combination of two or more sources is recommended for agrientrepreneurs.