Olayemi Cardoso, governor, Central Bank of Nigeria (CBN) on Tuesday launched what he described as a new era for agricultural financing as he inaugurated a revamped board of the Agricultural Credit Guarantee Scheme Fund (ACGSF) in Abuja, warning that banks’ lending to farmers remains below 5% despite agriculture’s central role in the economy.
Cardoso said the persistently low level of credit flowing to the sector underscored the urgency of rebuilding Nigeria’s agricultural finance system and repositioning the ACGSF as a more dynamic instrument for channeling capital to farmers and agribusinesses.
He told officials, board members and industry stakeholders that the inauguration marked “a defining moment” for the institution and for Nigeria’s broader efforts to use agriculture as an engine of growth, employment and food security.
Despite contributing more than one-fifth of GDP and employing nearly two-thirds of workers, the sector continues to suffer from what he called a longstanding and damaging financing gap. “Less than 5% of banks’ lending goes to the agricultural sector,” Cardoso said, arguing that this imbalance has constrained millions of smallholders who “feed our nation and drive our rural economy.”
Cardoso said the central bank would no longer accept what he described as a business-as-usual approach to agricultural lending. The new board, he said, reflects a renewed commitment to reform and a recognition that the ACGSF must adapt to the complexities of modern agriculture — from climate risk to fragmented value chains and the rise of agritech. He said the scheme’s core mission of de-risking agricultural loans remains essential, but its tools and governance structure must evolve to meet contemporary challenges.
The ACGSF, created in 1977, guarantees up to 75% of agricultural loans issued by banks, a mechanism that has historically enabled lenders to finance farmers who would otherwise be considered too risky
Cardoso noted that a 2019 amendment expanded the scheme’s share capital from ₦3 billion to ₦50 billion and broadened its operations, while introducing a more inclusive board structure with representation from farmers’ groups. “Such inclusivity is strategic; it enshrines that partnership between policymakers, financiers and the farming community,” he said.
He outlined a set of priorities for the newly inaugurated board, starting with deepening financial inclusion among underserved segments, especially women and young farmers.Cardoso said the scheme must collaborate with microfinance banks, cooperatives and fintech firms to design products suited to rural realities, noting studies showing that nearly 60% of rural women lack access to mobile internet, limiting their ability to use digital financial services. The goal, he said, is to ensure “a lack of collateral or remote location is no longer an insurmountable barrier to financing
Cardoso also pressed for stronger oversight and data-driven monitoring of loans guaranteed under the scheme. He urged the board to deploy technology such as satellite imagery and digital dashboards to track crop progress, disbursements and repayments in real time.Enhanced transparency, he said, will help identify emerging risks, improve loan performance and verify that credit is translating into higher productivity and income growth. “This Board must embed a culture of accountability and learning… ensuring that every naira guaranteed delivers real value on the farm and in the marketplace,” he said.
The reforms, he added, are central to achieving the government’s Renewed Hope agenda, which seeks to build a resilient, technologically advanced agricultural economy. The governor said smallholders — who produce around 90% of Nigeria’s food — must be prioritised if the country is to overcome its recurring food supply challenges and reduce rural poverty.0
Strengthening the ACGSF, he argued, is critical to unlocking investment in irrigation, mechanisation, post-harvest storage and other productivity-boosting inputs.He then urged the board to approach its mandate with ambition and discipline, saying that while Nigeria’s agricultural value chains are complex, the opportunities for transformation are vast. “With today’s inauguration, we have filled a void and renewed our commitment to a prosperous, food-secure Nigeria,” he said.He also pledged the central bank’s full support and expressed confidence that the new board would “drive significant progress toward our shared goals of agricultural prosperity and national economic development.”
