Poor Research Funding, Infrastructure Hurting Agric Lending – CBN
Poor funding for agricultural research and inadequate infrastructure are limiting farmers’ access to finance, a Central Bank of Nigeria official has said.
The Deputy Director and Special Assistant in the Office of the Deputy Governor, Economic Policy Directorate, Dr Michael Ononugbo, said Nigeria’s agricultural finance gap was rooted in structural weaknesses, not just capital shortage.
Ononugbo spoke at the National Close-Out Conference of the Global Project for Promotion of Agricultural Finance for Agri-based Enterprises in Rural Areas, GP AgFin Nigeria, held in Abuja.
The eight-year project, funded by Germany’s Federal Ministry for Economic Cooperation and Development and implemented by GIZ, reached 101,449 farmers and agribusinesses across 10 states.
Speaking on the theme, “From Access to Impact: Embedding Agricultural Finance in Nigeria’s Economic Policy Architecture,” Ononugbo said smallholder farmers operate in difficult conditions that make conventional lending hard.
He listed fragmented landholdings, limited technology, weak infrastructure, poor storage, climate vulnerability, volatile prices, lack of financial records, insufficient collateral and information asymmetry.
As a result, he said, farmers are “frequently underserved by formal financial institutions despite the strategic importance of the sector.”
He said successive policies focused too much on increasing credit supply without addressing suitability.
“The challenge, therefore, is not merely the availability of finance but the effectiveness, appropriateness, and sustainability of financing arrangements,” he said.
He warned that poorly structured, untimely or expensive financing “may fail to improve productivity and, in some cases, may exacerbate the vulnerability of borrowers.”
Ononugbo also decried poor funding for agricultural research.
“We must place greater emphasis on agricultural research and innovation. How much of the financing do we channel to research in agriculture? Innovative solutions and revolutionary practices will continue to elude us,” he said.
Earlier, Cluster Coordinator for GIZ’s Transformation of Agri-Food Systems programme, Dr Andrea Rüdiger, said GP AgFin showed the financing gap could be reduced with appropriate tools.
“GP AgFin Nigeria proved that the gap between farmers and finance can be closed. Today, we decide together what closing it at scale actually looks like,” she said.
Rüdiger said users grew from 1,260 in 2020 to over 101,000 by mid-2026, while loan disbursements rose from €776,000 in 2021 to €53.9m.
She said 11 financial institutions were supported to develop agric finance products, with 19 of 22 piloted products now fully integrated into their portfolios. Women accounted for 53 per cent of financial literacy trainees.
The project will wind down in October 2026, with its tools transitioning to GIZ’s EU- and BMZ-co-funded Value Chain Enhancement programme.