In a bold step to reshape Nigeria’s agricultural financing, Central Bank of Nigeria (CBN) has relaunched the Agricultural Credit Guarantee Scheme Fund (ACGSF) with a renewed focus on empowering smallholder farmers. Officially unveiled during the inauguration of the ACGSF’s new board, the move signals a significant shift in how agriculture will be financed across the country.
According to the CBN governor, this overhaul marks a new dawn for agricultural financing. The scheme, originally launched in 1977 has long served as a key tool for encouraging banks to extend credit to farmers, by providing a guarantee on agricultural loans.
Yet for decades, the agricultural sector, which employs nearly two-thirds of Nigeria’s workforce and contributes over 20 percent of GDP has received less than 5 percent of total bank credit. That mismatch has limited the growth potential of many farmers, especially the roughly 80–90 percent who are smallholders.
As part of the revamp, the ACGSF’s structure and capacity have been upgraded. The scheme’s share capital which stood at ₦3 billion was increased to ₦50 billion under a 2019 amendment, broadening its scope. Importantly, the new board now includes representatives of farmers, an inclusive and strategic measure designed to ensure policies reflect on-the-ground realities.
The primary aim is to open up affordable credit to smallholder farmers, many of whom lack collateral, a traditional credit history, or access to formal banking services.To achieve this, the CBN has called on the board, chaired by Olusegun Oshin, to develop financial products tailored for women, youth, and underserved rural communities.
Moreover, the new framework envisions leveraging fintech platforms, microfinance banks, and cooperatives to deliver innovative lending solutions. The bank also plans to adopt modern technologies, from satellite imagery to digital dashboards to monitor loan utilisation, track crop progress, and ensure transparency and accountability.
Officials believe this reconfigured ACGSF could become a cornerstone of Nigeria’s agricultural transformation. By enabling investments in irrigation, mechanisation, post-harvest storage, and value-adding activities, the scheme aims not only to increase output but also to boost incomes and stimulate rural economies.
Nevertheless, the path ahead remains demanding. The board must ensure that the expanded fund meets the scale of the investment needed across the country and that the credit reaches the right people in a timely and efficient manner.
Despite past underfunding, the revitalised ACGSF arrives at a critical moment: Nigeria’s agricultural sector stands at a crossroads, facing new challenges like value-chain complexity, climate risk, and evolving agritech dynamics.
“The central objective of the revamp is to unlock affordable credit for smallholders who account for 90 per cent of the nation’s agricultural output but remain underserved due to limited collateral, poor credit history and weak access to financial services.”
With the new board in place and a stronger financial base, there is cautious optimism that the scheme can deliver on those goals, offering smallholder farmers a real chance at modernising their operations, raising productivity, and contributing more meaningfully to national food security and economic growth.
By channeling credit to smallholder farms, CBN’s revamp of the ACGSF could spur increased agricultural output, strengthen food supply chains, and reduce Nigeria’s reliance on imports, potentially boosting rural incomes, stimulating local economies, and helping deepen domestic value chains, thereby supporting long-term economic diversification.
