ADB Loan Requirements. Complete Guide

By | March 21, 2022

In this post, I am going to take you through ADB loan requirements and other necessary information worth knowing about ADB Agricultural facilities. 

Let’s first start by learning about the main purpose of the ADB Bank before we get into the requirements of their agricultural loan facilities. 

About ADB Bank And Their Purpose 

The main focus of the Agricultural Development Bank (ADB) since its inception in 1965 has been the provision of credit facilities for the development and modernization of agriculture and allied industries. It is estimated that ADB is currently responsible for about 85% of institutional credit to the agricultural sector.

The Agribusiness Division is made up of two departments namely the Agricultural Value Chain and the Agricultural Services Department.

The Agricultural Value Chain Department focuses on deepening financing to the primary production sector, focusing on developing viable value chains and the Agricultural Services Department provides financial inter-mediation to the agro-marketing, agro-processing and agricultural support sub-sectors such as inputs distribution as well as agricultural-related infrastructure.

Now let’s look at the classification of their loan facilities.

Classification Of Agricultural Facilities

Agricultural facilities are classified based on the following:

  • Size of loan
  • Status of the borrower eg. Group loans, individuals, Limited Liability Company
  • Type of project or scheme
  • Purpose of loan
  • Source of funding

Terms of  Loan Facilities

The tenor of agricultural loans granted by ADB depends on the project type and thereby on such features as the cash flow, capital outlay and project maturity.

Based on the expected life of the project or activity the credit may be classified into three as follows

  • Short-term loan:  Typically granted as working capital to meet production, transportation and marketing of agricultural produce. The period for short term loans  is up to 18 months
  • Medium-term loan: Granted for such purposes as the purchase of farm equipment, raising of livestock and processing equipment. The period for medium-term loans is between 18 to 36 months.
  • Long-term loan: Made for new and existing projects which require heavy capital outlay and/or long gestation periods, such as the establishment of plantations or cattle ranches etc. The period for long term loans is typically between 36 months and 84 months.

ADB Loan Requirements

Requirements for credit vary from one category of borrowers to another. However the following  requirements apply to all categories

  • Submission of business proposal
  • Opening of account with the Bank
  • Details of account operation with other financial institutions.
  • Evidence of managerial capability to handle projects.
  • Evidence that project is not environmentally harmful
  • Evidence that the project can generate adequate cash flows to support repayment of facility.
  • Provision of security acceptable to the Bank

Forms of credit disbursement

  • Non-cash disbursement: The bank may disburse in kind or by making payment on behalf of the beneficiary customer according to the invoices submitted
  • Cash disbursement: Credit is given outright to the beneficiary to finance the approved activity.

Loan-making procedure and approval

Applicants are advised to observe the three steps involved in the processing of loan requests.

  • All applications for financial assistance should be directed to the Branch where the applicant’s account is held or a branch near the project site. On receipt of a request for a loan, a relationship manager or credit officer will contact the applicant for further discussions.
  • The credit officer or relationship manager will verify the information furnished by the applicant. In all cases, the project site may be visited to assemble the necessary data required to analyse the project.
  • After the project has been analyzed and found viable, the credit officer or relationship manager finally prepares a credit report and submits it to the appropriate approval authority


In all cases, the applicant will be required o provide security and/or collateral for the loan. These may take several forms, depending on the terms and conditions, nature and size of the facility granted.

  • Cash collateral in a blocked account
  • Group executive guarantee
  • Personal guarantee
  • Stocks, bonds and bills
  • Life policies
  • Indemnities
  • Landed properties
  • Assignments


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