Despite the increasing business ideas and opportunities in the country, livestock farming seems to be the most lucrative. There are many areas you could venture into when it comes to livestock farming one of which is goat farming.
Why you should consider goat farming
- Goat farming requires relatively low capital but yields high profits.
- A lot of Nigerians consume goat meat daily as such it can be seen as an everyday commodity that is highly demanded.
- Shoes, bags, belts and other leather-base materials are made from goat skin which is a very good source of leather
- Goats are easy to feed and manage as they require minimal supervision
- They also reproduce a lot which means continuity for your business
- Aside from normal consumption, goat milk is used in the production of cosmetics
- Pharmacists also make use of goat offal for drug production
- Even goat faeces are a great source of manure.
What you need to get started
Don’t venture into goat farming blindly or you could fail for the smallest reason. Get as much knowledge as possible on the business and how its run. Learn about goats, their feeding, mating, reproduction, and overall care process. Learn how to diversify the business into milk production, leather production and manure distribution. The best training would be a hands-on practical training.
There are different breeds of goat available in the Nigerian market as such; you need to determine which breed would best suit your purpose. Figure out why you’re venturing into goat farming and consider which breed would give you the best results. Raising two breeds is an option that requires larger capital.
The most suitable place to consider for goat farming is an area closest to pasture. The land should be spacious and fenced. Also, you’ll need a shelter for the goats so they can be shielded from harsh weather like rain and sun.
Pasture is the best form of food for goats but there are other healthy food options like specially formulated goat feeds. You can grow your own pasture or make arrangements for your goats to graze in a nearby land. You could also either buy feeds or manufacture them depending on how much you can afford.
Goats need utmost care (the female more than the male) this care should be ready available. You could have a vet doctor look in on the goats from time to time. This is necessary to avoid the spread of diseases which could very easily end your farm.
You shouldn’t wait until you’ve started operations to have a marketing plan on strategy. Right now when you are still putting things in place, consider your marketing strategy. You can even start networking.
The best way to avoid run-in with the law is to pay all and as at when due. Find out all the legal processes you need to follow, certification, documentation and all. If you need to get registered get it done and out of the way.
Consider employing a number of people to assist you depending on how big your farm is. it could be in form of permanent staffs or staffs that come in once or twice a week to assist you it all depends on what you can handle.
As you go, there are going to be other thing to put in place like inventory, bookkeeping, breeding and the likes but these listed above cover the basics you need to start up. don’t procrastinate; get started!
How MSMEs can get easy access to finance
MSMEs must take the following steps for loan readiness.
MSMEs are considered the backbone of the Nigerian economy. In 2019, they made up 90% of all registered businesses, contributed more than 50% of the country’s nominal GDP, and employ 84% of its labour force. Despite this, MSMEs were the recipients of less than 5% of all credit granted by the banking industry.
One reason for this is self-selection by MSME owners. Many MSMEs refuse to apply for loans from banks due to a fear of rejection and a belief that banks charge exorbitant fees and request hefty collateral before giving loans to MSMEs. Now more than ever, in this era of cashflow-based lending and low-interest rates, this harmful myth is costing businesses access to finance that they need to scale.
Another reason is the MSMEs’ lack of loan readiness. Unlike large companies, small business owners do not prepare themselves before applying for loans. This causes them to make many mistakes that discourage banks from lending to them due to a fear of non-repayment.
In order to overcome this hurdle and join large businesses in taking advantage of the low-interest climate, MSMEs must take the following steps for loan readiness:
1. Maintain financial records – Research shows that 69% of MSMEs in Nigeria do not keep detailed financial records. As a business owner, you must ensure that funds pass through your business account. Your business’s financial records as reflected in your bank statement will help your bank determine your repayment capacity. This is important, whether you want a collateral-free or collateral-based loan.
2. Use narrations for transfer into personal accounts – Again, always use your business account for business funds. However, if funds must be paid into your personal account for any reason, then ensure that those payments have a narration that reflects the purpose of the payment. For example, Two shirts purchased. This helps isolate business funds from personal when computing your turnover in order to determine your loan amount and repayment capacity.
3. Know what you want – Always know exactly how much you want and what you want it for. If your account officer asks you how much you want and you say “any amount you can give me”, they automatically assume you have no plan for the money or a plan for repayment. Before approaching your bank, determine how much you need and how much you can repay per month, using your monthly income.
4. Have a repayment plan – Always have a plan for repayment. Know how much you can afford to part with per month. Note however that your repayment plan might not align with that of the bank. Banks prefer not to take more than 33% of your monthly income in loan repayments, so your loan repayment period will probably be dependent on how much you can pay per month. Regardless, a well-thought-out repayment plan will build confidence in your repayment ability.
5. Engage your account officer– It is important to have an engagement with your account officer before applying for the loan. Instead of just writing a loan application letter to the bank and waiting for a response. Armed with your financial statement and your knowledge of how much you need and for how long, visit your account officer and have them work with you in getting your loan.
Ese Atakpu is a writer and banker.
AFEX raises $50 million to Finance Agri-SMEs in Nigeria
The $50 million Agri-SMEs fund is expected to bridge the funding gap between lenders and borrowers in the agric sector.
AFEX Commodities Exchange Limited (AFEX), a private commodities exchange company, has announced the first Warehouse Receipt Backed Commercial Paper in Africa. The paper has tech-enabled operations and a 24-hour fast cash turnaround for borrowers.
This was disclosed by AFEX in a statement issued and seen by Nairametrics on Thursday.
The $50 million Agri-SMEs fund is expected to bridge the funding gap between lenders and borrowers in the Nigerian agricultural sector with a commodity-backed instrument – for the first time.
Ayodeji Balogun, CEO, AFEX, stated, “The AFEX financing deal will help eradicate the high cost of procurement incurred by processors by deploying a discounted value of a warehouse receipt distributed among five leading players in the Food and Beverage, Trading Poultry and Animal Feed segments in Nigeria.
“The receiving companies are top 10 players in their respective segments. They have now been enabled access to a tool for managing price volatility, enabling up to 30% direct savings on prices.
“With our vision to reach a cumulative total of over $5 Billion in investment to the agriculture sector over the next five years, this financing deal is right on track to achieve this goal.’’
He added that as AFEX move towards building a derivatives market in Africa, “we want to be able to reduce exposure to price risk for stakeholders, by enabling them to hedge their positions and trade in commodity derivatives.”
Why it matters
- The warehouse receipts, which can then be transferred from commodities to a financial asset and listed under the borrower’s portfolio on the AFEX trading platform, will create a sustainable funding structure and address underfunding in the Nigerian agricultural sector.
- With the warehouse receipt system linked to financiers, the system allows financiers value and marks the commodities’ price to market on a real-time basis.
What you should know
- AFEX’s mission is to provide low-risk working capital facility for stakeholders in the Agro sector, in a way that is transparent and has a very high viable investment return.
- As a licensed commodities exchange and warehouse receipt system operator, it deploys a warehouse receipt system and collateral management infrastructure to increase market confidence for both lenders and borrower.
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