Nigeria shifts focus from direct farm funding to sustainable credit systems
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Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), announced the bank is moving away from directly funding agricultural projects and toward strengthening financial institutions to provide sustainable credit to farmers and other businesses.
For the past eight years, the CBN has been rebuilding development-finance systems, even amid economic challenges. Cardoso explained the priority now is to build resilient systems and improve coordination so that funding continues to generate value beyond individual programs.
The CBN will now focus on strengthening development finance institutions like the Bank of Industry and collaborating with state governments to improve access to finance. This shift follows the completion of an eight-year project, the Global Project for the Promotion of Agricultural Finance (GP AgFin), commissioned by the German Federal Ministry for Economic Cooperation and Development and implemented by GIZ.
GP AgFin facilitated €53.9 million (approximately 61 billion Nigerian naira) in financing to smallholder farmers, recording a 90% repayment rate across 150,300 transactions. Dr. Michael Ononugbo, a CBN Deputy Director, stated that future agricultural finance should be judged by its impact on productivity, income, and employment, not just loan volume. The GP AgFin program developed 22 tailored financial products for agriculture, with 19 of these now permanently integrated into partner financial institutions’ offerings, many incorporating digital delivery.
GIZ officials highlighted the program’s success in demonstrating that lending to smallholder farmers is viable, and they plan to transfer lessons learned from Nigeria to other African countries.
