The Central Bank of Nigeria (CBN) has said it plans to raise agricultural lending beyond the current level of less than five per cent of total bank credit, as the Governor, Mr. Olayemi Cardoso, declared that agriculture must take its “rightful place in our financial system and national priorities.”
Cardoso made this known in Abuja during the inauguration of the newly constituted Board of the Agricultural Credit Guarantee Scheme Fund (ACGSF). He described the event as a defining moment for the country, saying it signalled “a new dawn for agricultural financing in Nigeria” and a clear shift from past practices.
According to him, agriculture remains the backbone of Nigeria’s economy, contributing more than one-fifth of the country’s Gross Domestic Product and employing most of the working population. Despite this importance, he said the sector continues to receive only a small share of formal banking credit, with less than five per cent of total bank lending going to agriculture.
He explained that this long-standing underfunding has limited the productivity and expansion of millions of farmers across the country. He said the country can no longer tolerate the status quo, noting that the CBN is committed to changing the narrative and repositioning agriculture as a top national and financial priority.
Cardoso said the Agricultural Credit Guarantee Scheme Fund has played a critical role for decades by encouraging banks to lend to the agricultural sector. Through the Scheme, he said, the Fund guarantees up to 75 per cent of the value of agricultural loans, reducing the risk for banks and enabling them to lend even to farmers who were previously considered “unbankable.”
He disclosed that the Scheme was strengthened by a 2019 amendment, which increased its share capital from N3 billion to N50 billion and expanded its mandate. According to him, these reforms were designed to deepen financial inclusion in the agricultural sector and improve access to credit across rural communities.
The CBN Governor highlighted that the revised law now provides for a more inclusive board structure, which includes representatives of farmers alongside government officials. He said this inclusion is strategic because it ensures partnership between policymakers, financiers, and farming communities in shaping the Scheme’s operations and policies.
Cardoso described Nigeria’s agricultural sector as standing at a critical point of opportunity under the Federal Government’s Renewed Hope agenda. He said the vision is to build a resilient, technologically advanced, and inclusive agricultural economy that can ensure food security, reduce poverty, and create sustainable wealth for millions of Nigerians.
He noted that smallholder farmers make up about 80 per cent of farmers in Nigeria and are responsible for producing roughly 90 per cent of the nation’s food supply. However, he said these farmers continue to face serious challenges in accessing credit, mainly because many of them lack formal collateral and credit history.
He said this situation is no longer acceptable, especially given the central role these farmers play in feeding the nation and driving rural economic activity. According to him, the government and financial system must now deliberately remove the structural barriers that prevent farmers from accessing the funding they need.
Also speaking at the event, the Chairman of the newly inaugurated Board of the ACGSF, Dr. Olusegun Oshin, said the Scheme must place strong focus on grassroots farmers. He explained that the majority of Nigerian farmers live in rural communities and still struggle to access both formal credit and modern storage facilities.
He told the gathering that these farmers are the ones who feed the country, yet they remain weakly supported by the system. He noted that even when farmers are able to raise funds, poor storage infrastructure leads to heavy post-harvest losses because they lack the capacity to preserve their produce.
Dr. Oshin said addressing rural financing gaps and storage challenges must be central to the new Board’s agenda. He called for policies and programmes that would take credit, storage, and extension services directly to local farming communities.
The CBN, through the revitalised Scheme, now hopes to deepen agricultural finance, expand rural lending, and unlock the full potential of Nigeria’s agricultural sector in line with national development goals.
