Been in the agricultural sector and agribusiness sub-sector for six years, we have seen the up and down and the opportunities inherent in this sector, so we have chosen to stay, make it better and present the opportunities with low risk to other willing Nigerian to come on board.


This write up is for individuals or firms that has funds and wants to maximize their return from it. It’s also for people who wants to make more than what the money market is offering them and still enjoy the ease it offers.


Before I go further, please note that I am not a financial expert nor an adviser. All I am going to write here is for informational and educational purposes only. Before you explore it, do seek financial advice from a competent person or institution.


That said, Agricultural sector is what we are all familiar with, under which Agribusiness (Agricultural produce supplier) is a sub-sector. In this sector, all we do is to buy Agricultural produce from where it’s in abundance and sell where it’s or to processors and exporters at a margin or profit as the case may be.


The sector is very lucrative and has the capacity to double an investor’s money in a year if done right. Though it comes with some buckets of challenges for those who wants to operate from the field, which I will not be discussing here, definitely in another post.


Now to how you can make money issuing bank instrument to Agricultural produce suppliers.

We are familiar with what Bank instrument is, but for the sake of those who are not, bank instrument is a formal document issued by a bank as a financial solution or it’s equivalent assuring him of payment when all terms in such instrument are met. Examples includes BG (Bank Guarantee), LC (Letter of Credit), etc
Making money issuing BG


To make the most of this avenue, the funds owner will be issuing a bank Guarantee to a trader will have to ensure the following:
1. Have a supply contract or agreement to supply an Agro produce with a buyer or a processor.
2. Get a trader that has a verified credit line with a financial institution that needs a bank instrument to activate. In this case, the trader’s financier will only release funds to him when a buyer issues him a BG.
3. Get the trader to pay a fee called performance bond (pb) it’s usually between 1-2% of the required amount. This will serve as bank charges and little profit incase the trader defaults, you still get to make something anyway. You issue an LPO stating the terms and then
4. BG will be issued and the trader access his funds from financier, then supply commence.
5. At this stage, the supplier will deliver to the designated and the BG issuer’s company’s Waybill and Invoice will be used to process the delivery to the factory. This will follow with quantity and quality confirmation.
6. After a successful operation at the delivery point, the trader can then go and process his payment with the bank while the BG issuer gets his payment usually within 48hrs on the average.
7. Repeat 4-6.
We’ve done a video that explained this in details. Click on the link below to watch. Incase you need further explanation, question, clarification, feel free to post it in the comments box.

Click this link to watch the detailed video
https://www.youtube.com/watch?v=Wx1Vbqrh6TQ