The Central Bank of Nigeria (CBN) has reaffirmed its commitment to working with relevant stakeholders to strengthen credit guarantee schemes for farmers, as poor access to finance and high borrowing costs continue to constrain growth in the agricultural sector.
The commitment was made in Abuja by the Deputy Governor, Financial System Stability Directorate of the CBN, Lamido Yuguda, who represented the Governor, Olayemi Cardoso, at a stakeholders’ roundtable on agricultural credit guarantees.
The meeting brought together key players in the agricultural and financial sectors to explore ways of improving access to affordable and timely financing, particularly for smallholder farmers who remain critical to Nigeria’s food security and economic development.
Speaking at the event, Yuguda said agricultural lending was associated with unique challenges, including climate-related risks, commodity price volatility, inadequate collateral and information gaps, which often discourage financial institutions from extending credit to farmers.
He stressed the need to develop a sustainable financing ecosystem that would make credit more accessible, ensure proper risk allocation and management, and encourage continued investment in agriculture.
The CBN deputy governor urged financial institutions and other stakeholders to reconsider existing credit guarantee arrangements and explore innovative approaches that would address the financing difficulties confronting farmers.
Earlier, the Chairman of the Board of the Agricultural Credit Guarantee Scheme Fund (ACGSF), Dr. Olusegun Oshin, described the scheme as an important instrument for repositioning the agricultural sector and stimulating investment.
Oshin said the vision was to transform the fund from a traditional credit guarantee mechanism into a more responsive, innovative and catalytic institution capable of facilitating sustainable agricultural financing.
He noted that strengthening the scheme would help create opportunities for increased investment and improve the capacity of farmers to access the funds required to expand production.
Also speaking at a fireside chat, the President of the All Farmers Association of Nigeria (AFAN), Dr. Farouk Rabiu Mudi, called for simpler interest rate structures and timely disbursement of agricultural loans.
According to him, farmers need straightforward loan arrangements that take their financial realities into consideration, stressing that access to credit at the right time was just as important as affordability.
He said: “What we require is simple interest. Not only simple interest, whatever you are going to give us as a loan, give it to us at the right time.”
Similarly, the Permanent Secretary of the Federal Ministry of Livestock Development, Dr. Chinyere Ijeoma Akujobi, called for greater attention to women farmers under the credit guarantee scheme.
Akujobi observed that many women were unable to access bank financing because of stringent collateral requirements, which often exceeded their financial capacity.
She urged the scheme to develop more inclusive financing arrangements that would enable women to participate meaningfully in agricultural production and investment.
Stakeholders at the roundtable emphasised that strengthening agricultural credit guarantees would require closer policy coordination among government institutions, financial organisations and private sector operators.
They also highlighted the importance of building resilience against climate-related shocks, embracing digital transformation and encouraging greater private sector participation in agricultural financing.
