CBN Repositions Agricultural Credit Scheme to Boost Farmers’ Access to Loans
Oru Leonard
The Central Bank of Nigeria (CBN) has announced plans to reposition the Agricultural Credit Guarantee Scheme Fund (ACGSF) to improve farmers’ access to affordable financing, attract private-sector investment and strengthen agricultural productivity across the country.
The initiative, which involves revised operational guidelines, a digital application portal and strategic partnerships, is aimed at addressing persistent financing challenges confronting farmers and agribusiness operators.
CBN Governor, Mr Olayemi Cardoso, disclosed this on Tuesday at the National Stakeholder Roundtable on Strengthening Agricultural Credit Guarantees for Inclusive and Sustainable Growth, held in Abuja.
Cardoso, who was represented by the Deputy Governor, Financial System Stability, Mr Lamido Yuguda, said Nigeria’s agricultural financing requirements could not be met through public resources alone, stressing the need for greater participation by commercial banks, private investors and development finance institutions.
He explained that the apex bank was repositioning its development finance strategy towards market-based financing, stronger private-sector participation and sustainable risk-sharing arrangements.
According to him, agricultural credit guarantee mechanisms must evolve beyond protecting financial institutions against loan defaults to becoming instruments for attracting additional investments into agricultural production and value chains.
“Our objective should be to crowd private capital in, not crowd it out,” he stated.
The CBN Governor identified climate-related risks, commodity price volatility, inadequate collateral, information gaps and seasonal production cycles as major challenges limiting farmers’ access to credit.
He said addressing these constraints would require stronger institutional coordination, improved risk management, climate resilience, digital transformation and effective mobilisation of private capital.
Cardoso also called for closer collaboration among commercial banks, microfinance institutions, insurance companies, development finance institutions, guarantee providers and government agencies to improve agricultural financing delivery.
He emphasised the importance of integrating agricultural insurance, climate-risk mitigation and data-driven credit assessment into existing guarantee arrangements to strengthen lenders’ confidence and protect agricultural investments.
Earlier, the Chairman of the Agricultural Credit Guarantee Scheme Fund Board, Dr Olusegun Oshin, expressed concern over high borrowing costs, noting that prevailing financing conditions often failed to reflect the realities of agricultural production.
Oshin said farmers needed affordable financing arrangements that would enable them to recover production costs and generate reasonable returns.
He disclosed that the Fund was exploring co-financing, refinancing, agricultural insurance and stronger institutional partnerships to expand credit availability.
According to him, the objective of the reform is not merely to issue more loan guarantees but to facilitate additional agricultural lending at affordable rates and improve farmers’ access to finance.
In his welcome address, the Acting Director of the CBN’s Development Finance Advisory Department, Dr Paul Oluikpe, said financing constraints continued to limit agricultural productivity and investment.
Oluikpe noted that loan costs, repayment structures and collateral requirements often failed to accommodate the realities of farming, making it difficult for farmers and agribusinesses to secure adequate financing.
He announced the unveiling of a new brand identity for the Agricultural Credit Guarantee Scheme Fund, alongside revised operational guidelines presented as an exposure draft for stakeholders’ contributions and a new online portal.
He explained that the digital platform would improve accessibility, transparency, processing efficiency, monitoring and engagement with participating financial institutions.
The two-day stakeholder roundtable is also expected to examine agricultural insurance, climate-risk management, private capital mobilisation and strategic partnerships aimed at developing sustainable financing solutions for Nigeria’s agricultural sector.
Established in 1977, the Agricultural Credit Guarantee Scheme Fund was designed to encourage financial institutions to extend credit to farmers and agricultural businesses by providing guarantees against specified lending risks.
The CBN’s latest repositioning is expected to strengthen financing opportunities for smallholder farmers, medium-scale agricultural producers, agro-processors and other operators across the agricultural value chain.
