Heralding New Dawn for Agriculture Financing, Cardoso Inaugurates ACGSF Board

•Says smallholder farmers have continued to face high barriers to affordable credit, urges board to deepen financial inclusion, others

James Emejo in Abuja

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday inaugurated the newly constituted Board of the Agricultural Credit Guarantee Scheme Fund (ACGSF).

The central bank governor said the inauguration was not merely ceremonial but represented a defining moment, as well as a bold statement of intent that signals a new dawn for agricultural financing in the country.

Speaking at the ceremony held at the apex bank’s headquarters in Abuja, Cardoso, reaffirmed the CBN’s commitment to revitalising one of the country’s most critical sectors through strategic leadership, innovation, and collaboration.

According to him, Agriculture remains the backbone of the Nigerian economy contributing over one-fifth of GDP and employing nearly two-thirds of the working population.

Ironically, he said such a pivotal sector receives only a small fraction of formal credit as less than five per cent of banks’ lending goes to the agricultural sector.

The CBN governor pointed out that the longstanding financing gap had constrained the potential of millions of Nigerian farmers, adding that the inauguration of the board, came at an opportune time as the bank embarks on a bold new chapter in agricultural finance.

He pointed out that smallholder farmers – who make up 80 per cent of Nigeria’s farmers and account for about 90 per cent of agricultural production have continued to face high barriers in accessing affordable credit.

He said, “A new dawn for agricultural financing today marks a significant milestone in our collective pursuit of transforming Nigeria’s agricultural sector into a powerhouse for sustainable economic growth, job creation, and food security.

“It is a reassertion that we will no longer accept business-as-usual; instead, we embrace a future where agriculture is accorded its rightful place in our financial system and national priorities.”

Cardoso further explained that since its establishment by Decree No. 20 of 1977 the ACGSF had played a vital role in de-risking agricultural lending and encouraging financial institutions to extend credit to farmers and agribusinesses.

He noted that by guaranteeing up to 75 per cent of the value of agricultural loans, the scheme had historically served as a catalyst for banks to lend where they otherwise might not.

He said over the decades, countless farmers who would have been deemed ‘unbankable’ have accessed financing through the guarantee mechanism.

However, he said the challenges and opportunities of today’s agricultural landscape demanded that the ACGSF evolve beyond its traditional role.

He said, “Modern agriculture is far more complex – characterised by extensive value chains, advanced technologies, climate and security risks, and stakeholders ranging from smallholder cooperatives to agritech startups.

“We must therefore, reposition the ACGS as a dynamic, forward-thinking scheme capable of addressing these complexities. This includes leveraging the scheme’s strengthened capacity following the 2019 amendment, expanding its share capital from N3 billion to N50 billion and broadening the scope of its operations- and ensuring that its governance draws in the voices of all stakeholders.

“I note that the ACGSE Act now provides for seven board members comprising not only government officials but also scheme’s activities, partnership between policymakers, financiers, and the farming community in guiding the representative of Nigerian farmers, among others.”

Cardoso said such inclusivity remained strategic, adding that the sector stands at a crossroads of unprecedented opportunity.

He said the vision of the federal government’s Renewed Hope agenda was clear to build a resilient, technologically advanced, and inclusive agricultural economy that ensures food security, reduces poverty, and creates wealth for millions of Nigerians.

The central bank governor said, “realising the vision requires us to decisively overcome the financing constraints that have long stifled agriculture’s growth.

He said many farmers lacked collateral or credit history and were perceived as high-risk by conventional lenders, adding that this remained a structural anomaly.

He said, “We can no longer afford, given that these same smallholders feed our nation and drive our rural economy. The ACGSF must therefore assume a transformative role in closing the agricultural credit gap.

“It should not simply guarantee loans as a formality, but actively catalyse an expansion of lending to agriculture on affordable terms. We envision an agricultural financing ecosystem where farmers and agri-entrepreneurs can obtain credit to invest in modern inputs, irrigation, mechanization, storage, processing, and other value-adding activities.

“This will enable them to raise productivity, reduce post-harvest losses, and earn better incomes outcomes aligned with our national priorities for food security and economic diversification.”

Cardoso stressed that the ACGSF should become the cornerstone of the country’s agricultural transformation, working in concert with other government initiatives to channel resources to the grassroots of the economy.

He urged the board to focus on strategic priorities to swiftly unlock significant value by deepening financial Inclusion.

He encouraged members to expand the scheme’s reach to underserved segments of the farming population, especially women and youth.

He said, “We know that rural women, for example, are key actors in agriculture, yet they often have even less access to credit and technology than their male counterparts – studies indicate nearly 60 per cent of rural women do not use mobile internet, limiting their access to emerging digital services.

“The ACGSF should proactively target such groups by collaborating with microfinance banks, cooperatives, and fintech companies to design appropriate credit products and delivery channels…Our goal should be that a lack of collateral or remote location is no longer an insurmountable barrier to financing. Every hardworking farmer with a viable project should find in the ACGSF an enabling partner that helps them access the finance they need to grow their enterprises.

Cardoso further stressed the need to institute a framework for tracking the impact of guaranteed loans on agricultural productivity and farmers’ welfare.

Among other things, he urged the board to champion the use of data and technology for real-time monitoring of projects supported under the scheme, leveraging modern tools from satellite imagery to track crop progress, including digital dashboards that monitor loan disbursements and repayments.

He said, “We can greatly enhance transparency and accountability. Regular oversight will ensure that loans guaranteed by the fund are being used for their intended purposes and are yielding positive results.

“It will also help identify bottlenecks or emerging risks, such as high default in a particular region or sub-sector, so that we can respond proactively, whether through capacity- building for borrowers or adjustments in our approach.”