Reported by Simon Daniel Yusuph l Journalist at Weng Global
A Germany-funded agricultural finance programme has facilitated €53.9 million, equivalent to about N61 billion, in financing for 101,449 farmers and agribusinesses across Nigeria during its eight-year implementation.
The Global Project for the Promotion of Agricultural Finance for Agri-based Enterprises in Rural Areas, known as GP AgFin Nigeria, worked with financial institutions and agricultural businesses to improve access to financial services tailored to the needs of farmers and rural enterprises.
The project was commissioned and funded by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
The programme’s results were presented during its national close-out activities as stakeholders considered how the financial products, institutional capacity and agricultural lending models developed under the project could continue beyond its formal conclusion.
€53.9 Million Mobilised Through Partner Financial Institutions
According to figures presented by the project, 101,449 farmers and agribusinesses accessed adapted financial products and services during the eight-year intervention.
Partner financial institutions recorded 150,300 financial transactions, while €53.9 million was disbursed to farmers and agribusinesses without guarantees or warranties from GP AgFin.
The programme also developed and piloted 22 agricultural financial products. Of these, 19 were permanently integrated into the portfolios of partner financial institutions without continued GIZ/AgFin funding. Nineteen of the products also incorporated digital delivery mechanisms.
The figures indicate that the project focused not simply on providing financial resources but on helping financial institutions develop products and systems capable of serving agricultural businesses more effectively.
The programme operated across 10 Nigerian states and focused on value chains including maize, rice, cassava, Irish potato, poultry and aquaculture.
Project Targeted the Agricultural Finance Gap
Access to affordable and suitable finance remains an important challenge for Nigeria’s agricultural sector, particularly for smallholder farmers and rural businesses.
At the close-out conference in Abuja, Central Bank of Nigeria Deputy Director and Special Assistant in the Office of the Deputy Governor, Economic Policy Directorate, Dr Michael Ononugbo, said the country’s agricultural finance gap was linked to structural weaknesses within the sector and not simply a shortage of money.
He identified challenges including fragmented landholdings, inadequate infrastructure, limited access to technology, weak storage systems, climate-related risks and fluctuations in commodity prices.
Farmers and agricultural businesses can also struggle to provide conventional financial records and collateral, making it difficult for some financial institutions to assess their businesses using traditional lending models.
These conditions have historically contributed to the perception of agriculture as a relatively difficult sector for formal lending.
GP AgFin attempted to address part of that problem by working with both financial institutions and agricultural businesses.
Building Better Agricultural Lending Products
Rather than functioning primarily as a direct lender, the programme supported financial institutions in understanding agricultural value chains and designing products around farmers’ production cycles and business models.
The approach included training financial institutions in agricultural value-chain financing, business-model analysis and product development.
GIZ has documented examples of participating financial institutions using the programme’s support to redesign their agricultural lending models.
In one case, Gowans Microfinance Bank in Plateau State developed value-chain-specific agricultural products after receiving training through GP AgFin. The bank subsequently introduced lending practices based on farmers’ cash flows, agricultural cycles and business requirements.
Another example involved Light Microfinance Bank, also in Plateau State, which developed an Irish potato financing product and incorporated the Farmer Financial Cycle approach into its lending process. GIZ reported that the bank’s agricultural loan portfolio increased from N600 million in 2021 to more than N1.7 billion by 2025.
These examples illustrate the project’s broader strategy of making agricultural lending more closely aligned with the realities of farming businesses.
Farmers Also Received Financial Training
The project’s intervention extended beyond lending.
GP AgFin developed financial literacy and business training for farmers and agribusiness managers, with the aim of helping potential borrowers understand savings, investment, loans, financial management and the requirements involved in accessing formal credit.
GIZ has also worked with Federal Colleges of Agriculture in Ibadan, Kano and Akure to institutionalise its Farmer Financial Cycle training.
The training covers areas such as investment, loans, savings and personal financial management, with the intention of ensuring that knowledge developed during the project remains available to future agricultural entrepreneurs.
The project reported that more than 40 certified trainers were developed to continue disseminating the training approach after the programme.
Women and young people were also significant participants in the programme’s financial literacy activities. Reports from the close-out conference indicated that women represented 53 per cent of participants in demand-side financial training, while young people accounted for 39 per cent.
CBN Calls for Sustainable Financial Systems
The project’s close-out comes as the Central Bank of Nigeria continues to reconsider the role of direct development-finance interventions.
CBN Governor Olayemi Cardoso said the bank was moving towards strengthening institutions and systems capable of delivering sustainable credit rather than relying primarily on direct interventions.
Represented at the close-out conference by CBN Director of Development Finance Advisory Department, Dr Paul Oluikpe, Cardoso said the experience of the past eight years demonstrated the importance of building systems that can continue creating value after individual development programmes end.
The argument is significant for agricultural finance because temporary programmes may provide short-term assistance, but sustainable lending requires financial institutions to continue serving farmers using commercially viable models.
That means the long-term value of GP AgFin will depend partly on whether participating institutions continue using the products, knowledge and lending approaches developed through the project.
GIZ Says Agricultural Lending Can Work
GIZ officials involved in the programme said its results challenged the longstanding perception that lending to smallholder farmers was inherently too risky.
Dr Andrea Ruediger, Sector Coordinator for Rural Development and Agriculture Transformation of Agri-food Systems at GIZ Nigeria and ECOWAS, said the project’s experience demonstrated that agricultural businesses could become viable clients when financial institutions better understood their businesses, cash flows, production cycles and risks.
The programme’s reported 90 per cent repayment rate among participating microfinance institutions was also cited as evidence that agricultural lending can perform when products and lending processes are properly structured.
However, the results do not eliminate the wider challenges facing agricultural finance in Nigeria.
Farmers remain exposed to climate risks, inadequate infrastructure, market volatility, production costs and limited access to technology. These factors can affect both their ability to generate income and their ability to repay loans.
From Project Intervention to Long-Term Systems
One of the central issues emerging from the close-out is what happens after the programme formally ends.
The objective is for the financial products, training systems and institutional relationships developed through GP AgFin to continue operating without depending on the project’s direct support.
The project’s experience has already produced examples of financial institutions incorporating agricultural products into their regular portfolios. Nineteen of the 22 products developed under the programme were reported to have been permanently integrated into partner institutions’ portfolios without GIZ/AgFin funding.
The project’s tools and partnerships are expected to transition into GIZ’s EU- and BMZ-co-funded Value Chain Enhancement programme as GP AgFin Nigeria winds down.
This transition is important because agricultural finance requires continuity. Farmers need reliable access to credit, while financial institutions need confidence that agricultural lending can generate sustainable returns without excessive risk.
Why the N61bn Figure Matters
The reported N61 billion in financing provides an indication of the scale of credit that can reach farmers and agribusinesses when financial institutions have products designed around agricultural realities.
The more significant issue, however, may be whether the institutions involved can continue expanding such lending after the German-funded intervention ends.
The programme did not simply measure the amount of money disbursed. It also sought to change how financial institutions understand agricultural businesses and how farmers prepare themselves to access formal finance.
For Nigeria, where agriculture remains important to livelihoods, rural employment and food supply, improving access to appropriate finance can influence farmers’ ability to invest in production, acquire inputs, expand businesses and participate more effectively in value chains.
But finance alone cannot resolve the sector’s structural challenges. Improved roads, storage facilities, agricultural research, technology, market access and climate resilience remain important to ensuring that credit translates into sustainable productivity and income.
What Happens Next
GP AgFin Nigeria is moving from implementation to institutionalisation as the eight-year programme closes.
The immediate challenge for participating financial institutions, government agencies and development partners is to preserve and expand the approaches that have demonstrated practical value.
The Central Bank of Nigeria, the National Agricultural Development Fund, financial institutions, government agencies and development partners will also face the broader task of ensuring that agricultural finance becomes part of stronger and more sustainable financial systems.
For farmers and agribusinesses, the key question will be whether the access to tailored financial products developed during the programme continues and expands beyond the life of the intervention.
The reported €53.9 million in financing and more than 101,000 beneficiaries therefore represent not only the scale of an eight-year development programme, but also a test of whether Nigeria can build agricultural-finance systems capable of serving rural businesses on a lasting basis.
Weng Global – Stories beyond borders
Sources
- Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
- Central Bank of Nigeria
- Vanguard
- ThisDay
- Punch
- New Telegraph