The Deputy Director of the Central Bank of Nigeria (CBN), Dr Michael Ononugbo, has attributed the difficulty faced by Nigerian farmers in accessing finance to weak agricultural infrastructure, inadequate research funding and other structural challenges within the sector.
Ononugbo said expanding the volume of credit available to agriculture would not be enough to address the financing challenges confronting farmers and rural businesses if other constraints affecting production were left unresolved.
He made the submission at the National Close Out Conference of the Global Project for the Promotion of Agricultural Finance for Agri based Enterprises in Rural Areas, known as GP AgFin Nigeria, held in Abuja.
The eight year project, funded by the German government and commissioned by the Federal Ministry for Economic Cooperation and Development, was implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ.
The intervention reached 101,449 farmers and agribusinesses across 10 states during its implementation period.
According to Ononugbo, many smallholder farmers and rural enterprises operate under conditions that make them difficult customers for conventional financial institutions.
He identified fragmented farmland, poor access to technology, inadequate infrastructure and storage facilities, exposure to climate related risks and fluctuations in commodity prices among the factors affecting agricultural businesses.
He added that many farmers also lacked proper financial records and sufficient collateral, while limited information about their businesses created additional difficulties for lenders.
These conditions, he said, had left many agricultural producers without adequate access to formal financial services despite the importance of agriculture to the economy.
Speaking on the theme, “From Access to Impact: Embedding Agricultural Finance in Nigeria’s Economic Policy Architecture,” Ononugbo said attention should shift from simply increasing the supply of agricultural credit to ensuring that available financing was designed around the realities of farmers.
He noted that some agricultural financing arrangements could fail to deliver the desired results when funds were provided at the wrong time, structured poorly, priced beyond the capacity of borrowers or disconnected from the production cycle.
The CBN official, who also serves as Special Assistant in the Office of the Deputy Governor, Economic Policy Directorate, said the country needed to examine the broader factors affecting agricultural productivity alongside efforts to expand lending.
He particularly called for increased investment in agricultural research and innovation, questioning the proportion of agricultural financing directed towards research.
Ononugbo said inadequate funding for research could prevent the country from developing new technologies, production methods and other solutions capable of improving agricultural productivity.
He stressed that sustained investment in research was necessary if Nigeria was to generate innovative approaches to the challenges facing its agricultural sector.
Also speaking at the conference, the Cluster Coordinator for GIZ’s Transformation of Agri Food Systems programme, Dr Andrea Rüdiger, said the GP AgFin Nigeria project had demonstrated that targeted interventions could help bring farmers and financial institutions closer together.
Rüdiger said the next step was to ensure that the lessons and approaches developed through the project became part of the regular operations of financial institutions and relevant government policies.
She also called for stronger integration of the project’s experience into efforts to improve compliance with the CBN’s agricultural lending target.
According to her, the number of financial service users reached through the project increased from 1,260 in 2020 to more than 101,000 by the middle of 2026.
She said the value of loans disbursed also increased from €776,000 in 2021 to €53.9 million.
Rüdiger disclosed that 11 financial institutions had received support to develop agricultural finance products, while 19 of the 22 products tested through the project had been permanently incorporated into the portfolios of partner institutions.
Women represented 53% of those who received financial literacy training under the intervention, although women and young people continued to face difficulties accessing formal credit.
The project is expected to formally close in October 2026, with its tools, partnerships and lessons transitioning into GIZ’s Value Chain Enhancement programme, which is funded by the European Union and the German Federal Ministry for Economic Cooperation and Development.
Stakeholders at the conference said maintaining the gains recorded under GP AgFin would depend on incorporating its lessons into Nigeria’s agricultural and broader development policies, as well as ensuring that financial institutions continued to develop products suited to the needs of farmers and rural enterprises.
