Bank lending to Nigeria’s agricultural sector increased to 5.33% of total credit as of May 2025, marking a rebound after years of decline, according to the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).
The sector’s share of total lending had dropped from 6.18% in 2022 to 4.82% in 2024, amid slower growth and growing caution from banks. NIRSAL attributes the recent rise to renewed confidence and stronger risk management measures in agricultural financing.
The institution revealed that it facilitated over N70 billion in commercial financing for agribusinesses in Q3 2025, its best performance since inception in 2013. This brings its total mobilized financing to about N270 billion, highlighting an uptick in activity among commercial banks.
Renewed Interest from Banks
The renewed interest is largely driven by NIRSAL’s risk-sharing frameworks and technical support, which reduce default risk and improve loan quality. Two newly licensed banks have joined the agricultural finance space this year, leveraging NIRSAL’s tools to structure and manage credit portfolios.
“N70 billion may appear modest compared to the overall financing gap, but it proves that agriculture can be commercially and sustainably financed,” said Sa’ad Hamidu, Managing Director of NIRSAL.
Despite the progress, challenges persist. The sector’s contribution to GDP growth remains sluggish, and lending volumes are still below what’s required for large-scale transformation.
Building Capacity in Agricultural Finance
NIRSAL said that over 1,100 bank employees have been trained in agricultural finance in 2025, alongside additional sessions for value chain participants in areas like feedlot management, commodity exports, and climate finance.
The agency is also developing the NIRSAL LandBank Portal, a digital platform designed to connect stakeholders and provide data-driven insights for investors. In partnership with the Rural Electrification Agency, NIRSAL aims to boost off-grid energy access for rural production clusters — a move expected to enhance productivity and resilience.
With a target of N150 billion in total financing by year-end, NIRSAL hopes to further integrate agribusiness into Nigeria’s mainstream financial system.
What You Should Know
Last year, the House of Representatives urged the Central Bank of Nigeria (CBN) to allocate an additional $3 billion to NIRSAL to close the agricultural funding gap.
Hon. Uchenna Okonkwo emphasized that insufficient agricultural investment has worsened food insecurity, poverty, and economic stagnation. The recent increase in lending, he said, is a step forward — but sustained growth will depend on whether banks continue to view agriculture as a profitable commercial opportunity rather than a developmental obligation.
