Role of Financial Innovation in Enhancing Food Security, Agriculture in Nigeria

Oluchi Chibuzor narrates how Sterling Bank driving famers’ access to finance through digital solutions, customised financing, and strategic partnerships that empower them, boost yields, and strengthen food systems.

What if the key to Nigeria’s food security wasn’t more farmland – but smarter financing?

Despite boasting over 84 million hectares of arable land, many Nigerian farmers remain cut off from the financial tools they need to grow. In 2022, only 7 per cent of farming communities secured bank credit (NBS, 2022), leaving millions unable to scale operations. However, Sterling Bank is changing that narrative through digital solutions, customised financing, and strategic partnerships that empower farmers, boost yields, and strengthen food systems.

According to the Food and Agriculture Organization (FAO), agriculture contributes significantly to Nigeria’s gross domestic products (GDP), employing around 35 per cent of the workforce. The sector spans four key sub-sectors: crop production, livestock, forestry, and fishing.

Challenges in the Agricultural Sector

The agricultural industry faces deep-rooted challenges – low productivity, inadequate infrastructure, climate-related shocks, post-harvest losses, and most critically, limited access to finance. These factors have long discouraged commercial banks from engaging the sector.

However, in Lagos and Ogun States, the story is shifting. In 2022, 26% and 14% of farmers, respectively, accessed micro-credits (NBS) and nationally, the value of credit to private agriculture jumped from N853 billion in Q1 2020 to over N4 trillion by Q4 2021 1(NBS, 2022), illustrating what’s possible when financing is prioritised.

Unlocking Growth Through Financial Innovation

Sterling Bank has emerged as a transformative force in Nigeria’s agriculture sector. Through its HEART strategy – an investment focus on Health, Education, Agriculture, Renewable Energy, and Transportation- the bank developed the Agriculture Finance Value Chain Model (AgFin). This framework has channelled billions of Naira in financing to smallholder farmers, processors, and aggregators, enabling them to scale operations sustainably (Sterling Financial Holdings Company Annual Report, 2023).

“We’re investing in entire value chains, not just funding farms but supporting processors, aggregators, and market access,” said Abubakar Suleiman, Managing Director and CEO of Sterling Bank. The bank’s approach is both financial and digital. Through collaborations with agritech startups, it delivers weather analytics, remote diagnostics, and market intelligence directly to farmers. Tools like SABEX, its commodity-trading platform, link farmers to buyers and eliminate middlemen, while initiatives like SWAY-AgFin increase financing access for women and youth. channelled billions of Naira in financing to smallholder farmers, processors, and aggregators, enabling them to scale operations sustainably (Sterling Financial Holdings Company Annual Report, 2023).

“We’re investing in entire value chains, not just funding farms but supporting processors, aggregators, and market access,” said Managing Director and CEO of Sterling Bank, Abubakar Suleiman.

The bank’s approach is both financial and digital. Through collaborations with agritech startups, it delivers weather analytics, remote diagnostics, and market intelligence directly to farmers. Tools like SABEX, its commodity-trading platform, link farmers to buyers and eliminate middlemen, while initiatives like SWAY-AgFin increase financing access for women and youth.

Managing Director Sterling Bank Limited, Abubakar Suleiman Agriculture Summit Africa (ASA) and Beyond Sterling Bank convenes leading voices and changemakers at its flagship annual platform, Agriculture Summit Africa (ASA), a policy-driven forum advancing innovation, inclusive market access, and strategic collaboration across the agricultural value chain. Over the years, ASA has drawn the support and participation of respected partners including the Mastercard Foundation, Benue State Government, Leadway Assurance, and the International Finance Corporation (IFC), among others. These alliances have enriched the summit’s outcomes, powering farmer advisory programmes, nationwide radio initiatives, and evidence-backed policy dialogues designed to turn insight into action.To date, the bank has:

• Financed over one million farmers

• Disbursed more than N500 billion in agri-loans

• Trained 22,000+ farmers in modern farming techniques.

Real-World Impact: The Palm Valley Story

One of the standout success stories of Sterling Bank’s agricultural financing journey is Palm Valley Nigeria Limited, a valued partner since 2019. In 2021, the company secured N276 million to finance rice and maize production for 1,500 farmers. By 2022, this support grew to N250 million, benefiting 1,700 farmers and cultivating over 1,313 hectares. In 2023, the funding increased to N461 million, expanding the project even further. By 2024, Sterling Bank provided N819 million to fund the cultivation of hybrid vitamin A maize, involving around 2,000 farmers. This growing partnership with Palm Valley is not just a testament to the bank’s success but has also attracted more partners into its agricultural financing ecosystem.

Strategic Partnerships and the Road Ahead

Group Head of Agric Finance and Solid Minerals at Sterling Bank, Dr. Olushola Obikanye, highlighted the value of structured commodity finance, where farmers use their harvest as collateral, a model that improves liquidity and reduces risk.

Sterling Bank’s inclusion in the Nigerian Food Systems Transformation Alliance underscores its role in shaping the country’s agricultural future. This multistakeholder platform, made up of FMCGS, financial institutions, and government agencies, seeks to build a resilient and inclusive food system by 2030. Looking ahead, the bank is committed to expanding access to:

• Poultry finance

• Fertilizer finance

• Equipment and asset loans.

Through SABEX, it continues to bridge the gap between supply and demand, ensuring farmers get fair pricing and timely payments.

Where Strategy Delivers Results

Nigeria’s agriculture sector stands at an inflection point. With smart financing, inclusive platforms, and tech-driven solutions, Sterling Bank is proving that food security isn’t just a policy goal, it’s an achievable reality. To learn more or join the AgFin initiative, visit sterling.ng/agriculture

Sterling Bank is a leading Nigerian commercial bank and one of Africa’s most progressive financial institutions, widely recognized for its bold approach to customer advocacy and ethical banking. From eliminating local transfer fees through its OneBank platform to championing inclusive access to capital, the bank has consistently led with impact. Renowned for its HEART of Sterling strategy, which focuses major investments into the Healthcare, Education, Agriculture, Renewable Energy, and Transportation sectors of the Nigerian economy, Sterling continues to build financial solutions that go beyond banking to enable dignity, mobility, and opportunity for millions of Nigerians. Explore Sterling Bank offerings at sterling.ng.