THE MICRO-IRRIGATION AND FARM IMPLEMENTS LOAN
INDIVIDUAL LOAN
PRODUCT FEATURES
The Micro-Irrigation and farm implements loan is designed to cover the entire cost of irrigation farming project including purchase of equipment in established or start-up agri-enterprises to assist with fully mechanised or semi-mechanised irrigation as well as all the related costs on installation, boring/digging and related civil works.
- Loan disbursements involving acquisition of large equipment shall be made directly to the suppliers after sourcing appropriate quotations and proforma invoices.
- Where practical and possible, NEEF will work in partnership and serious collaboration with Ministry of Agriculture through the crops department and irrigation department in order to fully undertake appropriate due diligence and certification of both equipment and crops.
- The funds shall finance all eligible farmers in Malawi whether the small-holder farmers or the commercial farming sub-sectos for the sole purpose of acquiring agricultural equipment and other farm implements which may include but not be limited to the following:
- Irrigation equipment.
- Boreholes equipment.
- Small Dams.
- Water pumps.
- Generators.
- Land preparation equipment which includes, ridgers, ploughs, rippers, harrows etc.
- Agricultural related fencing.
- Hammer mills.
- Solar equipment for irrigation.
- Mini silos.
- Any other equipment related to agriculture that can be financed at microfinance threshold.
- The loan will also cover the cost of seeds, fertilizer and chemicals required for farming during the period from April to September, that is winter cropping.
TARGET MARKET
- The loans will be accessible by both individuals and groups.
- Individual and Group SMEs (individual/partnerships/private limited companies).
OBJECTIVES
- Contribute to food production and food security.
- Contribute to job creation.
- Contribute to the promotion of exports after attaining food surplus.
- Entrench agricultural business/entrepreneurship among the farming clientele.
CUSTOMER BENEFITS
- Access to cheaper farming capital during the winter cropping season.
- The term Loans will ease pressure on cashflows by spreading the cost over a period.
- The term Loans are for a specified fixed period with a grace period.
- The Loans will have a flexible repayment schedule (in annual, bi-annual, quarterly, and monthly instalments) over an agreed period.
REQUIREMENTS
- Detailed business plan with relevant cashflow projections and an indication of the product demand and supply chain.
- Business profile including relevant business licenses and certificates for existing farming businesses.
- Clean record from credit referencing Bureau.
- National ID(s) by individual client and all group members.
- Farmland availability of not less than 5 acres and evidence of ownership of farmland or leasehold agreement as guided by the New Land Act.
- Confirmation of Land ownership or lease agreement by Village Head/Traditional leader.
- Bank statement (minimum of 6 months).
- Business records (income statement, balance sheet, cash flow statement) for existing farming businesses.
- Physical collateral (see collateral requirements).
- Letter from local leader identifying the applicant.
- Sketch map (residence and business premises).
- Guarantor’s letter and his/her National ID.
- Spouse consent letter (where applicable) and his/her National ID.
- Memorandum and articles of association for private limited companies.
- Passport size photo (Color).
- Off-taker agreements where possible.
- Proof of payment or copy of latest pay slip for part-time farmers.
- Bank standing order or irrevocable letter of undertaking to remit salary deductions for salaried farmers.
- At least one quotation for the farm equipment including the purchase price and cost of installation for ready use.
- Quotation for the farm inputs where applicable.
- Assessment reports from the AEDO and AEDCs.
THRESHOLD
- Minimum Mwk 1,000,000.00 to Maximum Mwk 250,000,000.00.
TENURE
- Maximum: 12 Months.
- Grace period: Max 5 months for farm inputs : Negotiable for equipment procurement.
RATES/TARRIFS
- Interest rate 2.2% pm.
- Processing and Admin fee 4.5% .
- Life insurance 1.5%.
- Collateral insurance – based on collateral value.
SECURITY AND COLLATERAL REQUIREMENTS
The following assets will be used collateral for these loans:
- Landed property (registered and unregistered land).
- Motor vehicles.
- Woodlots and Orchards.
- Plant and Equipment (Financed or otherwise).
- Household Chattels.
- Insured crops and livestock.
Security for the loans will be a combination of any of the following:
- Registration of the equipment financed under personal property securities registry (PPSR) to the full value of the equipment.
- Legal Charge over landed property for the 100% of the value of the equipment financed (if available).
- Registration of movable machinery and equipment.
- Individual and business guarantees.
- Collateral insurance covering the equipment being financed, crops or livestock with NEEF’s interest noted and credit life insurance to cover death in case of individual and smallholder farmers.
GROUP LOAN
PRODUCT FEATURES
The Micro-Irrigation and farm implements loan is designed to cover the entire cost of irrigation farming project including purchase of equipment in established or start-up agri-enterprises to assist with fully mechanised or semi-mechanised irrigation as well as all the related costs on installation, boring/digging and related civil works.
- Loan disbursements involving acquisition of large equipment shall be made directly to the suppliers after sourcing appropriate quotations and proforma invoices.
- Where practical and possible, NEEF will work in partnership and serious collaboration with Ministry of Agriculture through the crops department and irrigation department in order to fully undertake appropriate due diligence and certification of both equipment and crops.
- The funds shall finance all eligible farmers in Malawi whether the small-holder farmers or the commercial farming sub-sectos for the sole purpose of acquiring agricultural equipment and other farm implements which may include but not be limited to the following:
- Irrigation equipment.
- Boreholes equipment.
- Small Dams.
- Water pumps.
- Generators.
- Land preparation equipment which includes, ridgers, ploughs, rippers, harrows etc.
- Agricultural related fencing.
- Hammer mills.
- Solar equipment for irrigation.
- Mini silos.
- Any other equipment related to agriculture that can be financed at microfinance threshold.
- The loan will also cover the cost of seeds, fertilizer and chemicals required for farming during the period from April to September, that is winter cropping.
TARGET MARKET
- The loans will be accessible by both individuals and groups.
- Individual and Group SMEs (individual/partnerships/private limited companies).
OBJECTIVES
- Contribute to food production and food security.
- Contribute to job creation.
- Contribute to the promotion of exports after attaining food surplus.
- Entrench agricultural business/entrepreneurship among the farming clientele.
CUSTOMER BENEFITS
- Access to cheaper farming capital during the winter cropping season.
- The term Loans will ease pressure on cashflows by spreading the cost over a period.
- The term Loans are for a specified fixed period with a grace period.
- The Loans will have a flexible repayment schedule (in annual, bi-annual, quarterly, and monthly instalments) over an agreed period.
REQUIREMENTS
- Detailed business plan with relevant cashflow projections and an indication of the product demand and supply chain.
- Business profile including relevant business licenses and certificates for existing farming businesses.
- Clean record from credit referencing Bureau.
- National ID(s) by individual client and all group members.
- Farmland availability of not less than 5 acres and evidence of ownership of farmland or leasehold agreement as guided by the New Land Act.
- Confirmation of Land ownership or lease agreement by Village Head/Traditional leader.
- Bank statement (minimum of 6 months).
- Business records (income statement, balance sheet, cash flow statement) for existing farming businesses.
- Physical collateral (see collateral requirements).
- Letter from local leader identifying the applicant.
- Sketch map (residence and business premises).
- Guarantor’s letter and his/her National ID.
- Spouse consent letter (where applicable) and his/her National ID.
- Memorandum and articles of association for private limited companies.
- Passport size photo (Color).
- Off-taker agreements where possible.
- Proof of payment or copy of latest pay slip for part-time farmers.
- Bank standing order or irrevocable letter of undertaking to remit salary deductions for salaried farmers.
- At least one quotation for the farm equipment including the purchase price and cost of installation for ready use.
- Quotation for the farm inputs where applicable.
- Assessment reports from the AEDO and AEDCs.
THRESHOLD
- Minimum Mwk 1,000,000.00 to Maximum Mwk 250,000,000.00.
TENURE
- Maximum: 12 Months.
- Grace period: Max 5 months for farm inputs : Negotiable for equipment procurement.
RATES/TARRIFS
- Interest rate 2.2% pm.
- Processing and Admin fee 4.5% .
- Life insurance 1.5%.
- Collateral insurance – based on collateral value.
SECURITY AND COLLATERAL REQUIREMENTS
The following assets will be used collateral for these loans:
- Landed property (registered and unregistered land).
- Motor vehicles.
- Woodlots and Orchards.
- Plant and Equipment (Financed or otherwise).
- Household Chattels.
- Insured crops and livestock.
Security for the loans will be a combination of any of the following:
- Registration of the equipment financed under personal property securities registry (PPSR) to the full value of the equipment.
- Legal Charge over landed property for the 100% of the value of the equipment financed (if available).
- Registration of movable machinery and equipment.
- Individual and business guarantees.
- Collateral insurance covering the equipment being financed, crops or livestock with NEEF’s interest noted and credit life insurance to cover death in case of individual and smallholder farmers.
OPENING HOURS
MONDAY – FRIDAY
7:30 AM – 4:30 PM
CONTACT US
NATIONAL ECONOMIC EMPOWERMENT FUND
P.O BOX 779, LILONGWE
PHONE # : +265 999 941 333 | +265 999 938 333
EMAIL: info@neef.mw