CBN Targets Smallholder Farmers Through Agric Guarantee Scheme

The Central Bank of Nigeria (CBN) has unveiled a new strategic direction aimed at expanding credit access to smallholder farmers and accelerating national food security efforts.

The apex bank relayed the national food expansion plan at the launch of the Agricultural Credit Guarantee Scheme Fund (ACGSF) in Abuja on Tuesday.

Speaking at the inauguration of the reconstituted ACGSF Board, CBN Governor, Olayemi Cardoso, described the revamp as “a new dawn” for agricultural financing.

He said the initiative reflected the Federal Government’s renewed commitment to reposition agriculture as a driver of inclusive growth, rural development, and economic diversification.

Cardoso noted that the ACGSF-established in 1977-remained one of the country’s most impactful development finance tools.

Yet, despite employing nearly two-thirds of Nigeria’s labour force and contributing over 20 per cent to GDP, the agric sector continued to receive less than five per cent of total bank credit.

This structural mismatch, he said, has stunted the potential of millions of farmers for decades.

He stressed that the agricultural landscape had evolved far beyond subsistence farming, now governed by integrated value chains, technology, climate risks, and a growing agritech ecosystem.

In line with these realities, he said the Scheme must transform into a dynamic, data-driven institution capable of supporting modern agriculture.

He highlighted the 2019 amendment that expanded the Scheme’s share capital from N3 billion to N50 billion and broadened its operational scope.

One of the notable enhancements, he added, was the inclusion of farmers’ representatives on the new Board-an “inclusive and strategic” move to ensure policies are grounded in real sector needs.

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The CBN Governor emphasised that the central objective of the revamp was to unlock affordable credit for smallholders who account for 90 per cent of the nation’s agricultural output but remained underserved due to limited collateral, poor credit history, and weak access to financial services.

He urged the Board, chaired by Dr. Olusegun Oshin, to design products tailored to women, youth, and other underserved groups while leveraging fintechs, microfinance banks, and cooperatives to deliver innovative lending models.

He also called for the deployment of technology-from satellite imagery to digital dashboards track loan utilisation and ensure measurable impact.