Bank lending to Nigeria’s agricultural sector has edged as much as 5.33% of complete credit score as of Might 2025, reversing a multi-year decline and signaling a cautious return of monetary establishments to agribusiness, in keeping with the Nigeria Incentive-Primarily based Danger Sharing System for Agricultural Lending (NIRSAL).
The uptick follows a interval of stagnation, the place agriculture’s share of lending fell from 6.18% in 2022 to 4.82% in 2024, amid slowing sectoral development and rising threat aversion.
NIRSAL has performed a central function on this shift.
In keeping with the group, it facilitated over N70 billion in industrial financing for agribusinesses within the third quarter of 2025—its strongest annual efficiency since inception in 2013.
That determine accounts for practically 1 / 4 of the N270 billion NIRSAL has mobilized for agriculture thus far.
Renewed Curiosity from Banks
The renewed curiosity from banks is partly attributed to NIRSAL’s risk-sharing frameworks and technical help, which goal to cut back default dangers and enhance the bankability of agribusinesses. Two newly licensed banks have entered the sector this yr, counting on NIRSAL’s instruments to construction and handle agricultural loans.
“N70 billion could seem modest in comparison with the dimensions of Nigeria’s agricultural financing wants, however the significance is profound,” mentioned NIRSAL Managing Director Sa’advert Hamidu. “It proves that agriculture may be commercially and sustainably financed.”
Regardless of the current positive factors, structural challenges stay. Agriculture’s contribution to GDP development has slowed, and lending volumes are nonetheless far under what’s wanted to help large-scale transformation.
NIRSAL’s mannequin—combining deal structuring, credit score ensures, and advisory providers—has helped some agribusinesses transition from one-off financing to routine banking relationships. However underemployment and informality proceed to dominate the sector.
Coaching on Agricultural Finance
NIRSAL says over 1,100 bank employees have undergone coaching on agricultural finance this yr, with extra classes for worth chain actors targeted on feedlot administration, commodity exports, and local weather finance. Whether or not these efforts translate into sustained lending development stays to be seen.
The establishment can be growing a digital platform, the NIRSAL LandBank portal, supposed to attach stakeholders throughout the agricultural ecosystem and supply knowledge for funding choices. It lately signed an settlement with the Rural Electrification Company to help off-grid vitality entry for rural manufacturing clusters—a transfer geared toward bettering resilience and productiveness.
Whereas NIRSAL targets N150 billion in financing by year-end, the broader query is whether or not Nigeria’s monetary system is able to deal with agriculture as a viable industrial sector quite than a improvement obligation. For now, the rise in lending share is a step ahead, however not but a pattern.
What You Ought to Know
Final yr, the Home of Representatives urged the Central Bank of Nigeria (CBN) to handle the difficulty of under-financing within the agricultural sector by offering NIRSAL with an extra $3 billion.
- In his presentation, Hon. Uchenna Okonkwo pointed to Nigeria’s struggling financial system, widespread poverty, and rising meals insecurity because of decreased agricultural productiveness.
- He attributed these points to the low ranges of capital funding and inadequate funding within the agricultural sector, which have severely hindered its development.
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