Centenary Bank offers a range of agricultural loans namely; the Production loan, Revolving production loan, Crop marketing loan, Farm Asset or Equipment Loan, Savings Linked Loan, and the Agribusiness Solar Loan. If you work in the agriculture industry, you must be aware of how expensive farming can be.
It can be quite expensive to start and maintain a farm, and you’ll probably require funding – especially if you’re new to the business. An agriculture loan from Centenary Bank can help with that.
There are several ways you may use the money from these agricultural loans—which are intended exclusively for use in the sector—to start up or develop your farm or ranch. You’ll be better off if you spend that loan wisely.
Let’s discuss the different types of loans offered under the Centenary Bank agricultural loans, that way you can make an informed decision regarding which one can set you up for success.
Production Loan
The purpose of this loan is to finance commercial activities in the agricultural production, processing, and marketing value chains, animal production (projects involving dairy, poultry, and pig farms), fishing and fish farming, beekeeping, and food processing (including grain mills, oil mills, and hullers).
The type and time of the agricultural activity that needs financing will determine the loan term and payback schedule.
Features
- Loan terms for working capital are limited to 24 months, however, they may be extended for development or investment purposes.
- Only interest payments may be made on a loan during the grace period if cash flow permits.
- Repayable in equal monthly installments, with the amount of each payment based on the anticipated cash flow from the agricultural activity.
- Minimum loan amount: UGX 100,000.
- Payments from other income sources are accepted
- A maximum loan of UGX 8 billion.
- Based on cash flows, irregular payments might be organized.
- Interest accrued on a declining balance
Requirements
- Current or Savings Bank account
- A Financial Card
- A Completed loan application form
- Payment of loan processing fee
- The project to be done must be an agricultural value chain activity.
- Experience with the project at hand
- The business endeavor needs to be successful.
- The applicant must reside in the branch’s designated business region.
- The applicant must be the land’s owner or occupant to be eligible.
- Security can be secured by titled or untitled real estate, mobile property like sheep, goats, and cows, mortgaged personal property, and business tools and equipment.
Benefits
- Attractive interest rate
- Repayment plans structured to accommodate the nature of cash flow
- Quick loan processing speed
- Grace periods are extended
- Several payments are made to accommodate the various manufacturing cycle stages.
Crop Marketing Loan
This is a crop-focused post-harvest short-term loan for Producer-farmers, Processors, Wholesalers, and/or Dealers to purchase produce during harvest, finance directly related transportation, storage, and/or meet working capital requirements for stocking with the sole intention of reselling soon.
The loan is only available for agricultural crop products that have consistent demand throughout the year (such as maize, rice, millet, sorghum, oil seeds, etc.).
Features
- Interest is charged on a declining balance.
- For producers (farmers) and processors/dealers, the loan amount is capped at 60% and 50%, respectively, of the market value of the crop gathered and pledged as security.
- Credit limit terms for producers-farmers and processors/dealers are 2 and 12 months, respectively.
Requirements
- Current or Savings Bank account
- Completed loan application form
- Payment of loan processing fee
- Financial card
- The borrower must deal in agricultural products
- Producer-farmers need to have been working in the industry for two (2) immediately preceding seasons.
- Processors/Dealers who have experience working with agriculture commodities and who are seeking financing for at least three (3) years
- Bank-acceptable forms of security include mortgages, including kibanja, the promise of agricultural products, receivables, etc.
- Assurance/Guarantee of two acceptable Guarantors
Benefits
- Attractive interest
- Quicker loan processing speed.
- Producers can avoid distress sales at harvest
Revolving Production Loan
This Centenary bank agricultural loan is made available to farmers who raise crops for the aim of funding cultivation costs such as the purchase of agro-inputs such as crop seeds, fertilizer, and pesticides, and covering labor costs, among other things.
Features
- Credit is continuous for a maximum of three years.
- 10% annual increase in loan amounts
- Every crop season, loans are made accessible and returned.
- For the first year, the line of credit will be for 121% of the credit limit accessed.
- Interest is levied when a balance declines.
- At no point may the outstanding loan amount surpass the annual maximum.
Requirements
- Current or Savings Bank account
- A Completed loan application form
- Payment of loan processing fees
- A Financial card
- Repeat borrowers who have timely repaid 4 consecutive loans for agricultural production
- There has been no change in farmers’ areas under cultivation or cropping.
- Acceptable forms of security include mortgages with kibanja, chattels, crop insurance, etc.
- Two (2) guarantors provide a personal guarantee.
- For loans with mortgages as security, a letter of continuing security
- Document link for the loan request form
- Every cycle, the loan officer visits the prior loan payout.
Benefits
- Attractive interest rate
- As long as there is no need to increase the limit, there is no requirement for a new credit appraisal for three years.
- Reduced costs for loan documentation
- Grace periods are given.
Savings Linked Loan
This is a short-term loan product that requires a customer who is either a producer-farmer or a processor to save every month a certain amount for a specific period to reach a targeted amount.
At the end of the savings term, which is typically 12 or 24 months, the customer can be availed of a loan against the savings for financing a specific purpose, such as the purchase of farm equipment, the construction of a farm store, or the purchase of agricultural processing equipment.
Features
- Deposit interest is calculated by the Banks Savings account regime
- Interest is imposed under the reigning interest regime on declining balances.
- Up to UGX 5 million, or two to three times the amount of savings, may be borrowed.
- A loan term of no more than 36 months
- Depending on the type of cash flow, how a loan is repaid may differ.
Requirements
- Current or Savings Bank account
- Completed loan application form
- Payment of loan processing fees
- Financial card
- Clients who are of legal age and working in agriculture
- Keep consistency in saving UGX 20,000 per month for at least a year.
- Purchased asset hypothecation or mortgage and a lien on accumulated savings are used as security.
Benefits
- 25% of the loan amount designated for a certain purpose can be saved.
- Speedier loan processing
- Attractive interest
- Offers of grace periods are made on an individual basis.
- Defaulting on debt early is not penalized
- Upon maturity, all savings are refunded with interest.
Agribusiness Solar Loan
The Agribusiness Solar Loan is a short- to medium-term loan designed to help small-holder and commercial farmers finance the purchase and installation of solar-powered irrigation systems.
Features
- For irrigation systems and related equipment, a minimum loan amount of UGX 100,000 and a maximum loan amount of UGX 50,000,000 are required.
- Adjustable loan terms of up to 60 months, depending on the borrower’s estimated ability to repay the loan.
- A declining balance is subject to a monthly fixed interest rate of 1.67%.
Requirements
- Current or Savings account
- A Completed loan application form
- A Financial card
- A commercial or small-scale farmer running a successful agribusiness
- Financed equipment is included in the list of possible collateral, in addition to any others.
Benefits
- Free installation, usage demonstrations, and training, as well as a warranty period
- Grace Period based on the customer’s cash flow
- Variable collateral needs are based on the size of the loan and the risk level.
- Various transaction channels, such as agents, in-person transactions, CenteMobile, and online banking.
- Any branch of Centenary Bank can provide services.
Crop marketing loan
This post-harvest short-term loan is intended for crop producers, processors, wholesalers, and dealers to purchase produce during harvest, financing directly related transportation and storage costs, or meeting working capital requirements for stocking with the sole intention of reselling shortly.
The loan is only available for agricultural crop commodities with year-round continuous demand (such as maize, rice, millet, sorghum, oil seeds, etc.)
Features
- Interest is charged on a declining balance
- For producers (farmers) and processors/dealers, the loan amount is capped at 60% and 50%, respectively, of the market value of the crop gathered and pledged as security.
- Maximum credit terms for producers-farmers and processors/dealers are 2 and 12 months, respectively.
Requirements
- Current or Savings Bank account
- Completed loan application form
- Payment of loan processing fee
- Financial card
- The borrower must deal in agricultural products
- Producer-farmers need to have been working in the industry for two (2) immediately preceding seasons.
- Processors/Dealers who have experience working with agriculture commodities and who are seeking financing for at least three (3) years
- Bank-acceptable forms of security include mortgages, including kibanja, the promise of agricultural products, receivables, etc.
- A promise from two reliable guarantors
Benefits
- Attractive interest rate
- Quicker loan processing speed.
- Producers can avoid distress sales at harvest
Farm Asset or Equipment Loan
With the help of this Centenary farm asset or equipment loan, farmers can buy low-cost equipment like sprayers, farm tools like steel plows, paddlers, and tractor attachments and accessories, a fodder cutter, a tractor oil engine, and a pump, as well as higher-priced farm machinery like tractors, combine harvesters, rice haulers, etc.
Features
- Interest rate is charged on a declining balance
- Loan amounts ranging from 50% to 75% of the equipment’s purchasing price
- 60 months is the maximum loan repayment period (5 years)
- The method of repayment is determined by the borrowers’ net cash surplus from produce sales proceeds.
Requirements
- Current or Savings account
- Completed loan application form
- Financial card
- Payment of loan processing fees as per current fees of micro and SME/Corporate loans
- 10 acres or more of farming for commercial farmers
- Personal guarantee from two people the Bank will accept
- Bank-acceptable Security, such as a mortgage on real estate or other property
Benefits
- Attractive interest rates.
- Quicker loan processing speed
- Equipment financed can be security
Conclusion
You should make proper financial arrangements before requesting any of the centenary bank agricultural loans. Which resources can help you the most and maintain your business afloat? What much money must you borrow?
All these strategies must be established in advance of applying for the Cente Agricultural loan because they will guarantee that you use the money responsibly.
