BoA Overhauls Loan Verification Framework to Curb Fund Diversion
James Emejo in Abuja
The Bank of Agriculture (BoA) yesterday announced a comprehensive reform programme aimed at eliminating the diversion of subsidised agricultural loans to so-called “political farmers”, as it intensifies efforts to ensure government interventions reach genuine smallholder farmers across the country.
The bank’s Managing Director/Chief Executive, Mr. Ayodeji Oludare Sotinrin, disclosed that the institution had overhauled its loan verification framework by introducing a technology-driven credit profiling system incorporating Bank Verification Number (BVN) validation, Know Your Customer (KYC) protocols and Global Positioning System (GPS) farm mapping.
According to him, the new measures are designed to permanently eliminate the longstanding challenge of fictitious beneficiaries and middlemen diverting resources meant for genuine farmers, while promoting transparency and accountability in the deployment of government intervention funds.
He said the reforms formed part of a broader strategic roadmap to modernise the bank’s operations, expand grassroots financial inclusion and strengthen support for the federal government’s food security agenda.
Sotinrin explained that as Nigeria’s apex agricultural development finance institution, the BoA remained committed to providing single-digit interest loans to smallholder farmers in order to shield them from high commercial lending rates and reduce production costs.
He added that the bank was expanding partnerships with state delivery platforms, licensed input suppliers and international development partners to improve the effectiveness of agricultural interventions.
As part of the strategy, the BoA recently signed a Memorandum of Understanding with the United Nations Development Programme (UNDP) to align the bank’s revitalisation programme with the UNDP’s Integrated Smart States Programme.
He said the partnership would help transform Nigeria’s agricultural sector into an investment-ready ecosystem capable of attracting blended finance and climate funding.
The collaboration also includes the implementation of the One Million Hectare Tree Crop Initiative, described as a presidential priority expected to promote commercial agriculture, create jobs and boost non-oil exports.
Sotinrin said, “Our vision for the Bank of Agriculture is to deploy capital in an intelligent, smart and highly efficient way to reposition the institution as a catalyst for food security and rural prosperity.
“We are bringing everyone into the financial net, especially the youthful population of farmers in our hinterlands, to create a new, resilient food system for Nigeria.”
The bank also disclosed that it had commenced an extensive digital transformation programme, supported by the UNDP through the provision of critical information and communications technology infrastructure.
It said the initiative includes the deployment of solar-powered facilities across its 110 branches nationwide to guarantee uninterrupted operations as well as the introduction of digital farmer platforms and agency banking models to extend financial and extension services directly to rural communities.
Meanwhile, the National President of the All Farmers Association of Nigeria (AFAN), Muhammad Magaji, backed the bank’s stricter verification process, saying it was necessary to ensure subsidised loans reached genuine farmers.
While calling for faster loan disbursement to align with planting seasons, he maintained that the verification framework would help prevent intervention funds from being hijacked by “political farmers.”
He also pledged the association’s continued collaboration with the BoA to strengthen the delivery of agricultural interventions and improve access for genuine smallholder farmers.
The bank further reaffirmed its commitment to working closely with commodity associations, verified cooperative societies and other stakeholders through regular town hall meetings and sector engagements to enhance beneficiary identification and accelerate the country’s food security objectives.
