CBN Orders Agric Fund to Boost Credit for Nigerian Farmers

The Central Bank of Nigeria (CBN) has directed the newly inaugurated Board of the Agricultural Credit Guarantee Scheme Fund (ACGSF) to ensure that lack of collateral or remote location no longer prevents Nigerian farmers from accessing credit.

Governor of the CBN, Mr. Olayemi Cardoso, gave the charge during the inauguration ceremony in Abuja, describing the Scheme as a critical institution that must evolve to meet the financing needs of modern agriculture.

“At less than 5 percent, formal credit to agriculture is far below what it deserves, despite the sector contributing over one-fifth of Nigeria’s GDP and employing nearly two-thirds of the working population,” Cardoso said. “Our goal is that a lack of collateral or remoteness should no longer be an insurmountable barrier to financing.”

The 48-year-old ACGSF guarantees up to 75 percent of agricultural loans, enabling banks to lend to farmers who would otherwise be considered “unbankable.” Cardoso noted that a 2019 amendment expanded the Scheme’s share capital from N3 billion to N50 billion and broadened its mandate to include representatives of Nigerian farmers on the Board.

He urged the Board to strengthen monitoring mechanisms, stressing that guaranteed loans must be tracked to ensure they improve agricultural productivity, farmer incomes, and food security. “Leveraging technology such as satellite imagery and digital dashboards will improve transparency and accountability,” he said.

The CBN Governor emphasized the need to address structural barriers facing smallholder farmers, who make up 80 percent of Nigeria’s farming population and produce about 90 percent of the nation’s food. Many lack collateral or credit history and are perceived as high-risk by conventional lenders, despite feeding the country and sustaining the rural economy.

Cardoso also highlighted the importance of promoting financial inclusion for women and youth in agriculture. “Rural women are key actors in agriculture yet face even less access to credit and technology. The Scheme must work with microfinance banks, cooperatives, and fintechs to design suitable credit products,” he said.

Dr. Olusegun Oshin, chairman of the newly inaugurated Board, echoed the Governor’s call, stressing that the Scheme must focus on grassroots farmers who often lack access to credit or storage facilities.

Cardoso described the inauguration as “a defining moment — a bold statement of intent signaling a new dawn for agricultural financing in Nigeria,” pledging full support from the CBN for the Board’s mandate. He called for innovation, integrity, and determination to transform Nigeria’s agricultural value chains and ensure the Fund becomes a cornerstone of agricultural development.