Cardoso Explains Shift from Direct Development-finance Interventions to Stronger Credit System to Agriculture, Others

• Ononugbo: credit must raise productivity, incomes, jobs 

•GIZ AgFin project unlocks d €53.9 million to smallholder farmers, project records 150,300 transactions, 90% repayment rate 

•8-year project proves smallholder lending can work, says Ruediger 

•Badmus: banks must see farmers as viable businesses

James Emejo in Abuja

Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday said the apex bank had moved away from direct development-finance interventions to building stronger institutions and systems capable of sustainably delivering credit to agriculture and other productive sectors of the economy.

Cardoso disclosed this at the National Close-out Conference of the Global Project for the Promotion of Agricultural Finance for Agri-based Enterprises in Rural Areas in Nigeria (GP AgFin), held in Abuja.

He said the experience of the past eight years had demonstrated that development-finance systems could be rebuilt and sustained, despite economic fragility and uncertainty.

He said the priority was no longer simply to deploy money into specific projects, but to strengthen institutions, improve coordination and create systems that would continue to generate value after individual development programmes had ended.

Represented by CBN Director, Development Finance Advisory Department, Dr. Paul Oluikpe, Cardoso said, “We believe that building systems is more important than just giving money. Building resilient systems is more important than simply providing funding for specific projects.”

According to him, CBN has “pivoted away” from maintaining the heavy footprint it previously had in the development-finance space, opting instead to deploy its convening power and advisory capacity to bring relevant institutions and stakeholders together.

Cardoso said the approach involved strengthening development finance institutions, including Bank of Industry (BoI) and other relevant agencies, while also working with state governments to deepen the delivery of development finance.

It also emerged that the project, commissioned and financed by the German Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), facilitated €53.9 million, (about N61 billion) in financing to smallholder farmers through partner financial institutions.

The CBN governor urged stakeholders to ensure that the lessons and practices generated by GP AgFin were incorporated into existing systems rather than lost with the closure of the project.

He said, “The end should be much more than simply a closure,” stressing that sustainable systems should prevent the country from repeatedly starting over with new interventions.

The eight-year GP AgFin programme reported substantial expansion in access to agricultural finance, with over 101,449 farmers and agribusinesses accessing tailored financial products and services, generating 150,300 financial transactions.

He disclosed that 22 tailored agricultural financial products were developed and piloted, with 19 permanently integrated into the portfolios of partner financial institutions without GIZ/AgFin funding. Also, 19 of the products also incorporated digital delivery, while partner microfinance banks recorded repayment rates of more than 90 per cent.

The project, which ran from 2018 to 2026 across 10 states, focused on six value chains—maize, rice, cassava, Irish potato, poultry and aquaculture.

From Access to Impact

Delivering the keynote address, CBN Deputy Director and Special Assistant, Office of the Deputy Governor, Economic Policy Directorate, Dr. Michael Ononugbo, said the next phase of agricultural finance must be measured by its impact on productivity, incomes, employment, food security, and resilience rather than merely by the volume of loans disbursed.

Speaking on the theme, “From Access to Impact: Embedding Agricultural Finance in Nigeria’s Economic Policy Architecture,” Ononugbo said access to finance was only the starting point.

He said, “The true test of agricultural finance is not whether credit has been extended, but whether that credit has transformed lives, strengthened value chains, and contributed to sustainable economic progress.”

He stated that agriculture was central to employment, food security, rural development, and economic diversification, but continued to face constraints including fragmented landholdings, inadequate infrastructure and storage, climate vulnerabilities, volatile commodity prices, weak financial records, and limited collateral.

Consequently, he said, financing had to be aligned with agricultural production cycles and supported by reliable data, market linkages, risk-sharing mechanisms, advisory services, digital innovation and effective institutional frameworks.

Ononugbo also stated that financial products must be tailored to individual value chains because the financing needs and risk profiles of rice farmers, poultry operators, fish farmers, processors, aggregators and input suppliers were not the same.

He said the integration of agricultural-finance products into the portfolios of partner institutions was particularly significant because it indicated a transition from externally driven projects to institutional ownership.

He stated, “Development projects are valuable because they introduce innovations, demonstrate viability, and build capacity. However, lasting impact depends on whether domestic institutions embrace and sustain these innovations beyond the life of a project.”

He disclosed that CBN’s experience with direct intervention programmes had also informed its changing approach.

According to him, an internal assessment in 2025 showed that the bank’s intervention portfolio had exceeded N10 trillion, with outstanding repayments approaching N4.7 trillion.

While acknowledging the role such interventions had played, he said the experience had exposed challenges, including market distortions, excess liquidity, and difficulties for monetary management.

Ononugbo stated that CBN was consequently repositioning itself as a facilitator, catalyst and policy enabler rather than a primary lender.

He called for stronger agricultural research and innovation, stating that sustainable productivity growth would be difficult without investment in areas, such as improved seedlings, fish feeds, poultry production, and soil health.

Project Leaves Behind Institutionalised Products

In his remarks, Chief Executive, National Agricultural Development Fund (NADF), Mr. Mohammed Ibrahim, said the real measure of a development project should extend beyond what it achieves during implementation to what remains after its closure.

Ibrahim said GP AgFin had tested financial approaches, operational tools, and technologies, in partnership with financial institutions and practitioners, creating assets that should now be deployed across the wider ecosystem.

“The opportunity for our society is to move from successful projects to sustainable systems,” he said.

He said NADF, implementing agencies, financial institutions and development partners were committed to building on the project’s achievements and advancing inclusive finance while improving the measurement of impact.

GIZ: Smallholder Finance is Feasible

Meanwhile, Sector Coordinator, Rural Development and Agriculture Transformation of Agri-food Systems (TAFS), Dr. Andrea Ruediger, said the project had challenged the long-standing perception that lending to smallholder farmers was inherently too risky.

Ruediger said the programme had reached more than 101,000 farmers across 10 states, mobilised more than N61 billion, developed tailored financial products, and built knowledge and training capacity intended to survive the project.

She said the results constituted evidence that could contribute not only to Nigeria’s agricultural-finance policy but also to wider international development practice.

She stated that GP AgFin was part of GIZ’s global agricultural-finance programme covering nine African countries, with approaches developed in Nigeria being transferred into the wider programme.

According to her, the project has also trained more than 40 certified trainers and reached over 1,100 students at Federal Colleges of Agriculture, helping to build capacity beyond the immediate beneficiaries.

She urged stakeholders to use the close-out not as an endpoint but as a transition into a phase of scaling proven models.

Preparing Banks, Farmers for Agricultural Lending

In her presentation, Head of Project, GP AgFin, Ms. Ruskiyat Badmus, said the project’s central challenge had been the limited visibility of smallholder farmers within the formal financial system.

Badmus explained that the programme deliberately worked on both sides of the divide—helping farmers understand finance while equipping financial institutions to understand agricultural businesses and develop appropriate products.

Rather than provide funds directly, Badmus said GP AgFin facilitated the financial system to make smallholder farmers more bankable.

The project helped financial institutions identify viable business models, understand agricultural value chains, develop suitable products, and improve credit and monitoring practices.

The result, she said, was that more than 100,000 smallholder farmers previously excluded from formal financial services gained access to finance, while about 50,000 became repeat borrowers.

She put the repayment rate at 90 per cent, stating that the figure demonstrates that agricultural lending could perform when properly structured.

Badmus said the majority of beneficiaries were served by microfinance banks because commercial banks often lacked the structures and appetite to serve the smallholder segment under their traditional business models.

Beyond lending, the project trained 21,128 participants in financial literacy, comprising 16,006 farmers and 5,122 agribusiness managers, according to the media brief.

Women represented 53 per cent of demand-side training participants, while young people accounted for 39 per cent. Through its Market Access Training approach, about 80 to 85 per cent of participants were women.

The project also supported 11 financial institutions in developing agricultural-finance products and worked to institutionalise its training materials and knowledge products.

Badmus said eight knowledge products had been developed and made available for continued use, while more than 40 certified trainers could continue disseminating the approaches after the project formally concludes in October.

She identified product ownership by financial institutions, piloting before scaling, proper understanding of agricultural value chains, and financing of genuinely profitable enterprises as some of the major lessons from the programme.

Badmus also stressed the importance of data in tracking farmers, transactions, and outcomes, alongside stronger linkages among farmers, financial institutions, markets and other value-chain actors.