The Central Bank of Nigeria (CBN) has pledged to remove the high barriers to credit farmers face and lift agricultural lending above the current level of less than five per cent of banks’ credit.
CBN Governor Olayemi Cardoso made the pledge while speaking at the inauguration of the newly constituted Board of the Agricultural Credit Guarantee Scheme Fund.
He stated that agriculture must receive its “rightful place in our financial system and national priorities.”
Cardoso pointed out that smallholder farmers constitute 80 per cent of Nigeria’s farmers and produce about 90 per cent of food, yet they continue to face high barriers to credit.
“Many lack collateral or credit history, a situation we can no longer afford, given that these same smallholders feed our nation and drive our rural economy,” he said.
The CBN governor said the event marked “a defining moment, a bold statement of intent that signals a new dawn for agricultural financing in Nigeria.”
Cardoso further stated that agriculture remains the backbone of the economy, contributing more than one-fifth of GDP and employing most Nigerians, yet “it receives only a small fraction of formal credit, less than 5 per cent of banks’ lending goes to the agricultural sector.”
According to him, this chronic underfunding has stifled productivity and expansion for millions of farmers. “It is a reassessment of norms: we will no longer accept business-as-usual,” he said. “Instead, we embrace a future where agriculture is accorded its rightful place.”
Cardoso said the fund, which guarantees up to 75 per cent of the value of agricultural loans, had helped banks lend to farmers for decades, including those considered “unbankable.”
He noted that the scheme had been strengthened following a 2019 amendment that expanded its share capital from N3 billion to N50 billion and broadened its mandate. He said the reform was designed to deepen inclusivity, adding that the revised Act now provides for a board composed not only of government officials but also of farmers’ representatives.
“Such inclusivity is strategic: it enshrines partnership between policymakers, financiers, and the farming community in guiding the Scheme’s activities,” he said. Cardoso described the sector as standing at the “crossroads of unprecedented opportunity” under the Federal Government’s Renewed Hope agenda.
The CBN governor said the vision was to build a resilient, technologically advanced, and inclusive agricultural economy that “ensures food security, reduces poverty, and creates wealth for millions of Nigerians.”
Also speaking, the chairman of the newly inaugurated board, Dr Olusegun Oshin, said the scheme must focus on the grassroots, where the majority of farmers struggle without credit or storage facilities.
“Those that feed us are those weak, poor farmers very far away in the villages and who don’t have access to credit,” adding that even when they manage to raise funds, “they don’t even store it properly because they don’t have the capacity for storage,” he added.
