Written by Commercial banks in Nigeria are refusing to lend under the Federal Government’s Agricultural Credit Guarantee Scheme Fund (ACGSF), and industry analysts warn a food crisis could follow if nothing changes.
Mr. Seun Bolarinwa, President of the Association of Corporate Affairs Managers of Banks (ACAMB), explained that high operational costs, poor insurance coverage and the scattered nature of smallholder farming communities made agricultural lending too risky for most banks. He added that while the scheme reduces exposure, banks still bear a share of any loan loss, and recovery processes often stall because of administrative bottlenecks.
The ACGSF, managed by the Central Bank of Nigeria (CBN), was set up to encourage banks to lend to farmers. Its share capital stands at N50 billion. Despite this, CBN Governor Mr. Yemi Cardoso disclosed in December 2025 that agriculture still receives less than five per cent of total bank lending, even though the sector contributes over one-fifth of Nigeria’s GDP and employs a large share of the population.
Farmers can access up to N50 million through participating banks under the scheme. Many smallholders, though, continue to struggle with collateral requirements and low awareness of the programme.
With food prices still elevated in markets across Nigeria, experts say closing the credit gap is urgent. Any further decline in farm financing risks pushing more households deeper into food insecurity during the current planting season.
