Federal Government Approves ₦250 Billion Low-Interest Loan Facility for Smallholder Farmers Through Bank of Agriculture

The Federal Government has approved a ₦250 billion financing facility for the Bank of Agriculture (BOA) aimed at expanding access to affordable credit for smallholder farmers across Nigeria.

The Minister of Agriculture and Food Security, Senator Abubakar Kyari, disclosed the development during the Quarterly Citizens and Stakeholders Engagement Session held in Abuja. According to the minister, the facility will enable farmers to obtain agricultural loans at single-digit interest rates, making financing more accessible for millions of small-scale producers.

Kyari explained that the intervention forms part of the government’s broader strategy to strengthen agricultural financing, improve insurance coverage, and utilize key institutions such as the Nigerian Agricultural Insurance Corporation (NAIC), the National Agricultural Quarantine Service (NAQS), and the Bank of Agriculture to support farmers and agribusiness operators.

The minister noted that improving access to affordable agricultural credit is essential for boosting food production, increasing farm mechanization, and strengthening Nigeria’s food security system. He added that the ₦250 billion facility will help farmers purchase modern farming equipment, quality seeds, fertilizers, and other critical inputs required to increase productivity.

According to Kyari, the initiative is designed to improve the livelihoods of rural farmers while also stimulating growth across Nigeria’s agricultural value chain. He stated that expanding financial support for farmers will create more economic opportunities and drive sustainable development within the sector.

The minister also highlighted the progress recorded through agricultural insurance support in recent years. He revealed that the Nigerian Agricultural Insurance Corporation has provided insurance coverage to more than 199,000 farmers over the past two years, protecting agricultural investments valued at approximately ₦700 billion.

He explained that strengthening agricultural insurance is necessary to protect farmers against risks such as crop failure, climate challenges, pests, and other uncertainties that can threaten farm productivity and income.

Kyari further pointed out that the Ministry of Agriculture has taken additional steps to support farmers by distributing more than 1.9 million bags of fertilizer to nearly one million farmers nationwide. The government has also introduced stronger regulatory measures to improve transparency and accountability within the fertilizer distribution system.

These initiatives are expected to enhance productivity and ensure that farmers have access to the inputs needed to expand crop production and improve farm yields.

In a related development, the Bank of Agriculture previously secured a $1 billion intervention fund in partnership with the African Export-Import Bank (Afreximbank) in September 2025. The facility was designed to strengthen Nigeria’s agricultural value chain by addressing financial barriers that often prevent smallholder farmers from accessing affordable loans.

The intervention fund is expected to support farmers with financing for farm inputs, agricultural mechanization, storage infrastructure, and improved market access.

The National Smallholder Farmers Fund, approved by President Bola Tinubu, also aims to strengthen financial support for small-scale farmers who produce more than 90 percent of Nigeria’s agricultural output. By expanding credit access and improving market linkages, the fund is expected to increase farm productivity and stabilize food supply across the country.

Kyari also commended the Agricultural Research Council of Nigeria for its role in driving innovation in crop production and agricultural research. He explained that research institutions are helping to develop improved crop varieties that can boost yields and increase farmers’ income.

As part of ongoing efforts to revitalize Nigeria’s cocoa industry, the government has begun distributing 40 million cocoa seedlings to farmers. The initiative is expected to encourage large-scale plantation development and strengthen Nigeria’s position in the global cocoa market.

The National Agricultural Development Fund has also played an important role in supporting agricultural growth by financing several development programmes over the past two years, contributing to improved productivity and sustainability within the sector.

In October 2025, the Bank of Agriculture secured an additional $200 million Livelihood Support Fund through a partnership with the International Organization for Migration. The fund is designed to support displaced persons and migrants across Nigeria by providing financial assistance that promotes economic inclusion and resilience.

The agreement for the programme was signed by the Deputy Director General for Operations at the International Organization for Migration, Ugochi Daniels, and the Chief Executive Officer of the Bank of Agriculture, Ayo Sotinrin. The initiative represents another step toward expanding financial empowerment opportunities for vulnerable populations while strengthening Nigeria’s agricultural and rural economy.

The latest ₦250 billion agricultural financing facility is expected to play a major role in improving access to credit, expanding food production, and supporting the long-term growth of Nigeria’s agriculture sector.