Nigeria’s Incentive-Based Risk Sharing System for Agricultural Lending has closed 2025 with more than ₦100 billion in approved credit guarantees for loans and investments, its highest annual finance facilitation since operations began in 2013, marking a significant shift in lender confidence toward agriculture and agribusiness.
The milestone signals a turning point for MSMEs operating across Nigeria’s agricultural value chain, as the guarantees provide a critical safety net that allows financial institutions to fund activities traditionally considered too risky. Since its inception, the institution has facilitated over ₦290 billion in finance spanning primary production, processing, logistics, market development, and exports, helping small and medium agribusinesses expand operations and attract capital.
Beyond capital flows, the intervention has translated into real economic impact. More than 520,000 jobs have been created, industrial capacity has been strengthened, and agricultural value has been protected through insurance-backed frameworks. Over three million people, largely in rural communities, have benefited through improved livelihoods and reduced exploitation of smallholder farmers.
At the core of this performance is a structured risk-sharing model that continues to reassure lenders. To date, the institution has facilitated ₦298.49 billion in finance and issued 949 guarantees supporting 251 agribusinesses, while maintaining a non-performing loan rate below 0.8 percent. This level of portfolio quality has reinforced confidence among commercial banks and investors seeking predictable returns from agriculture-focused MSMEs.
The guarantees are complemented by technical assistance that improves bankability. Over 20 agribusiness models have been developed, alongside extensive training for financial institution staff and value chain actors, ensuring both lenders and entrepreneurs understand risks, costs and growth pathways.
Insurance has also played a central role. Through sustained advocacy, five index insurance products were introduced, and nine insurance firms were brought into the agricultural space. This resulted in 1.8 million policies issued, with billions of naira paid out in claims and recoveries, helping MSMEs and smallholder-linked businesses recover from climate and production shocks. Interest drawback incentives have further reduced borrowing costs, supporting hundreds of obligors.
These efforts recently earned the institution the MSME Agrifinance Enabler of the Year Award at a national MSME finance event in Lagos, recognising its role in structuring and de-risking transactions in a sector long viewed as volatile. Speaking at the ceremony, the institution’s leadership said the achievement demonstrates the strength of structured risk-sharing, strong partnerships with financial institutions and the resilience of Nigeria’s agribusiness entrepreneurs, noting that the focus remains on attracting partners across the agrifinance value chain rather than chasing recognition.
As a facilitator rather than a direct lender, the institution has played a crucial role in shifting commercial bank attitudes. While liquidity exists in the Nigerian market, risk perception has historically limited agricultural lending. Crossing the ₦100 billion mark in a single year reflects a clear move from caution to confidence, driven by credible guarantees and robust management systems that make agribusiness financing more attractive to banks and investors.
Looking ahead, the institution has signed dozens of master agreements with counterparties committed to joint agribusiness financing and positioned itself as a delivery partner for global climate finance initiatives. This is expected to unlock climate finance inflows while building nationwide capacity for sustainable agricultural practices, an area of growing importance for MSMEs facing climate-related risks.
Drawing lessons from earlier smallholder financing schemes, its offerings have also been refined for sub-national governments and private investors, with improved farmer onboarding, geospatial mapping, soil testing, and mechanization support designed to boost productivity and reduce default risks.
As preparations begin for the next phase, the institution says its journey is only beginning, with plans to deepen partnerships, innovate further and scale solutions that reduce risk and unlock more finance for agriculture. For Nigeria’s agribusiness MSMEs, the momentum signals expanding access to capital, stronger risk protection and a more supportive financing ecosystem heading into 2026.
