Key Points

• Agricultural finance must move to center stage.

• Banks should expand structured farm lending.

• Policy focus shifts toward rural productivity growth.

The central bank of Nigeria is working harder to get more money to the farming sector. Governor Olayemi Cardoso has said that agriculture should take back its “rightful place” in the country’s financial system as food security and rural livelihoods come under pressure.

Cardoso said at the opening of the board of the Agricultural Credit Guarantee Scheme Fund (ACGSF) in Abuja that this was a new beginning for farm financing, moving away from what he called years of neglect and underinvestment.

Agriculture makes up more than 20% of Nigeria’s GDP and employs most of the country’s workers. But it makes up less than five percent of all bank credit, which Cardoso said has slowed down growth and made millions of small farmers less productive.

Agricultural lending is much lower than what the country needs

Cardoso said that lending to farmers needs to move from the edges of bank portfolios to the centre of the country’s development strategy. He said that the chronic lack of funding has kept farmers stuck in cycles of low output, made food supply chains weaker, and made Nigeria more vulnerable to food price rises.

The central bank’s guarantee program, which covers up to 75% of the value of agricultural loans, has made banks more willing to take on risk. A law passed in 2019 made the scheme stronger by increasing its capital base from ₦3 billion to ₦50 billion and allowing farmer representatives to join.

Changes to agricultural lending are aimed at small farmers

The governor said that smallholder farmers, who make up 80% of Nigeria’s farming population and grow about 90% of the country’s food, still can’t get formal credit because they don’t have collateral or credit histories.

He called for more financial inclusion, especially for women and young people in rural areas. He said that almost 60% of rural women still can’t get mobile internet, which makes it hard for them to use digital financial services.

Cardoso said that microfinance banks, cooperatives, and fintech companies should work together to promote group lending, mobile money, and agent banking so that people in remote areas who don’t have physical assets can get loans.

Technology to help with monitoring and tracking loans

The central bank wants to use technology to make monitoring and accountability better. Cardoso said satellite imagery, digital dashboards and data-led supervision should be used to track crop performance, loan utilisation and emerging risks.

He stressed that “every naira guaranteed must deliver real value on the farm,” urging the new board to prioritise speed, transparency and impact.

Board chairman Olusegun Oshin said the scheme would focus on grassroots farmers who lack storage, credit and modern farming support, describing them as the backbone of Nigeria’s food economy.