Agricultural finance policies and strategies in Nigeria: Issues and implications for increased outreach

Abstract

Since independence in 1960, several agricultural finance-oriented policy instruments have been deployed by government in the quest for agricultural development and reduction of poverty. These policies and strategies include the establishment of Development Finance Institutions (DFIs), special credit schemes as well other regulatory initiatives to enhance bank lending to the agricultural sector. The paper reviews the various policies and strategies as well as the institutional framework on which they are made operational through the activities of the Central Bank of Nigeria, Deposit Money Banks, DFIs, NGOs/MFIs as well as development partners. Achieving the efficacy of policies to attain optimal outreach of agricultural finance products in Nigeria is however faced with several challenges from policy/institutional perspectives, supply- as well as the demand-side. To increase the outreach of agricultural finance in Nigeria calls for an all-inclusive approach through a well articulated financial inclusion strategy, improved supervision of DFIs to entrench corporate governance, policy consistency, de-risking of the agricultural sector and provision of technical assistance to banks, DFIs, and the farmers as well.