CBN Seeks Improvement in Nigeria’s Approach to Agricultural Financing

The Central Bank of Nigeria has declared a decisive shift in the nation’s approach to agricultural financing, with Governor Olayemi Cardoso insisting that the sector must finally take its “rightful place” in Nigeria’s financial system and national priorities.

Speaking in Abuja at the inauguration of the newly reconstituted Agricultural Credit Guarantee Scheme Fund (ACGSF) Board, Cardoso said the event marked “a defining moment” for agricultural credit in the country. 

He noted that agriculture, despite contributing more than one-fifth of GDP and employing the majority of Nigerians, still receives less than 5 per cent of bank lending, a level he described as unacceptable.

Cardoso said this chronic underfunding has weakened productivity and limited growth for millions of farmers. He emphasised that the CBN will begin pushing agricultural lending far above current levels, stressing that the sector can no longer operate under business-as-usual financing patterns.

He highlighted that the ACGSF, which guarantees up to 75 per cent of agricultural loans has been a vital support mechanism for farmers considered “unbankable.” He added that the fund’s capacity was expanded through a 2019 amendment that raised its share capital from N3bn to N50bn, broadened its mandate, and introduced farmers’ representatives to the board to strengthen inclusivity.

Cardoso said the sector stands at “the crossroads of unprecedented opportunity” under the Renewed Hope Agenda, with Nigeria’s goal being to build a resilient, technology-driven, and inclusive agricultural economy that reduces poverty and ensures food security.

He noted that smallholder farmers, who constitute 80 per cent of Nigeria’s farming population and produce about 90 per cent of its food, still face steep barriers to credit. Many lack collateral and credit histories, making it necessary to adopt new models that reach those at the heart of the food system.

The governor urged the board to focus on financial inclusion for women and young farmers, noting that nearly 60 per cent of rural women do not use mobile internet— a limitation that shuts them out of digital financial services. He called for collaboration with microfinance banks, cooperatives and fintech firms to expand access through group lending, mobile money and agent banking.

Cardoso also emphasised the need for stronger monitoring systems, saying modern tools such as satellite imagery and digital dashboards must be deployed to track loan performance, crop progress and risks. “Every naira guaranteed must deliver real value,” he said.

On his part, the board chairman, Dr. Olusegun Oshin, said meaningful impact must begin at the grassroots, where peasant farmers struggle without credit or storage facilities. He said the scheme must focus on those “weak, poor farmers in the villages” who feed the nation but lack the support to scale up.

Oshin added that technology, accountability and proper reporting would be central to ensuring that funds disbursed to farmer groups produce measurable results. He pledged that the board would uphold ethical standards and strengthen the scheme’s contribution to national food security.