The Central Bank of Nigeria (CBN) has introduced a new strategic direction to enhance credit access for smallholder farmers, aiming to accelerate national food security efforts. This initiative was announced at the launch of the revamped Agricultural Credit Guarantee Scheme Fund (ACGSF) in Abuja. According to CBN Governor, Olayemi Cardoso, the move represents a significant shift in agricultural financing, reflecting the Federal Government’s commitment to repositioning agriculture as a driver of inclusive growth and economic diversification.
Established in 1977, the ACGSF has been a crucial development finance tool, yet the agricultural sector, which employs nearly two-thirds of Nigeria’s labor force and contributes over 20% to the country’s GDP, receives less than 5% of total bank credit. This disparity has hindered the potential of millions of farmers for decades. The CBN Governor emphasized that the agricultural landscape has evolved, with integrated value chains, technology, climate risks, and a growing agritech ecosystem, requiring the Scheme to transform into a dynamic, data-driven institution.
The 2019 amendment expanded the Scheme’s share capital from N3 billion to N50 billion and broadened its operational scope. Notably, the new Board includes farmers’ representatives, ensuring policies are grounded in real sector needs. The central objective of the revamp is to unlock affordable credit for smallholders, who account for 90% of the nation’s agricultural output but face challenges due to limited collateral, poor credit history, and weak access to financial services.
The CBN Governor urged the Board to design products tailored to women, youth, and other underserved groups, leveraging fintechs, microfinance banks, and cooperatives to deliver innovative lending models. He also emphasized the need for technology deployment, such as satellite imagery and digital dashboards, to track loan utilization and ensure measurable impact. With this new direction, the CBN aims to address the long-standing challenges faced by smallholder farmers, ultimately contributing to the country’s food security and economic growth. The successful implementation of this initiative is expected to have a significant positive impact on Nigeria’s agricultural sector and the economy as a whole.