The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) is recalibrating its strategies to power a new era in agricultural financing, reigniting hope among lenders and agribusinesses seeking easier access to sustainable credit.
This renewal aligns with the Federal Government’s efforts to make agriculture a key driver of economic growth.
For decades, Africa has struggled to allocate at least 10 percent of its annual budgets to agriculture, a target believed to be crucial for global competitiveness. In Nigeria, agricultural budgetary funding has remained below five percent for over ten years, with most of it consumed by overhead costs—leaving little for production expansion.
With limited fiscal space, the government turned to the banking sector to finance agriculture, though lenders were often hesitant due to the sector’s perceived high risks and default rates. To address this, NIRSAL was created as a mechanism to bridge the gap between finance and agriculture. Since inception, it has facilitated over ₦270 billion in financing from banks and other sources, recording a failure rate of less than one percent.
However, public misconceptions persist. Many Nigerians wrongly view NIRSAL as a direct lender or provider of government grants, whereas its true mandate is to facilitate access to credit, not disburse loans.
Now over a decade old, NIRSAL continues to clarify its role while raising awareness to encourage more lenders to utilize its guarantees.
Under new leadership, NIRSAL is reshaping its operations through innovative finance facilitation, risk-sharing frameworks, business advisory, partnerships, and strategic stakeholder engagement.
“We are repositioning NIRSAL to become a more agile and impactful institution—one that truly serves as the bridge between finance and the farm.
Our focus is on unlocking more capital for the agricultural value chain, empowering smallholder farmers, agritech start-ups, processors, and exporters,” a senior official told reporters.
Driving Value Chain Development
Beyond facilitating credit, NIRSAL is focusing on strengthening value chains. Through risk-sharing and technical assistance programmes, it is helping banks understand agricultural cycles and supporting farmers to become creditworthy through training, aggregation, and market linkages.
Economists say the agency’s revival is timely. With food inflation high and the government intensifying its food security drive, finance remains central to agricultural productivity. Analysts believe bridging Nigeria’s multi-trillion-naira agricultural financing gap requires innovative institutions like NIRSAL to take the lead.
The agency has introduced new financing frameworks and targeted guarantees for mechanization, input supply, irrigation, and export-oriented agribusinesses. It is also working with non-interest banks and global partners to expand access to affordable, sustainable credit.
Promise Rekindled
Under the Olayemi Cardoso-led Central Bank of Nigeria, NIRSAL’s founding vision is reawakening. One year after its new board’s inauguration, the agency’s operations are aligning with broader efforts to make agricultural financing profitable and sustainable.
In the first three quarters of 2025 alone, NIRSAL facilitated over ₦70 billion in commercial financing for the agricultural value chain—its strongest annual performance since inception. That figure represents nearly a quarter of the total financing it has enabled since establishment, underscoring the impact of its ongoing transformation.
This revival comes as bank lending to agriculture rebounds from 4.82 percent of total credit in 2024 to 5.33 percent by mid-2025. Newly licensed banks are now leveraging NIRSAL’s risk-management tools, with two of them accounting for a significant share of its 2025 portfolio—an indication that confidence in agricultural lending is returning, anchored on structure rather than subsidies.
Rebuilding Confidence, Scaling Strategically
NIRSAL’s renewed direction aligns seamlessly with President Bola Tinubu’s market-driven economic vision. As the Central Bank phases out direct intervention programmes, NIRSAL has emerged as a key ecosystem enabler linking banks, agribusinesses, and government in long-term, commercially viable partnerships.
Its blended-finance model bridges public policy objectives with private sector profitability. At the core of this resurgence is NIRSAL’s integrated value chain approach—identifying opportunities, structuring deals, offering technical support, and sharing risk with partner banks.
By applying data-driven risk management and building the capacity of lenders and borrowers, NIRSAL is showing that agriculture can be truly bankable.
In 2025 alone, more than 1,100 bank staff have been trained under its agricultural lending framework, while 450 value-chain actors received training in feedlot management, commodity export, and climate finance—laying the groundwork for sector-wide transformation.
Digital and Green Frontiers
Looking ahead, NIRSAL’s agenda is becoming more digital and climate-smart. The upcoming NIRSAL Landbank Portal will connect researchers, financiers, and agribusinesses through a data-driven platform for opportunity mapping and investment planning.
In addition, a new partnership with the Rural Electrification Agency (REA) aims to deliver off-grid power to agro-production and processing clusters—boosting productivity and climate resilience in rural economies.
As global financing shifts toward sustainability, NIRSAL’s pursuit of climate finance positions Nigeria to attract new streams of concessional capital for agricultural development. Combined with a steady flow of commercial financing, this could fast-track Nigeria’s food security goals and its ambition of becoming a $1 trillion economy.
Journey Ahead
For NIRSAL, 2025 marks a defining year—not just of recovery, but of renewed purpose. Its strongest performance on record reflects a shift from fragmented interventions to focused, scalable partnerships with measurable impact.
In Kano and Adamawa States, NIRSAL is already coordinating dry-season production of sunflower and rice by linking seed, fertilizer, and mechanization providers with ready offtakes—placing smallholder farmers at the centre of shared prosperity.
To sustain this momentum, NIRSAL must deepen transparency, strengthen partnerships, and maintain lender confidence—critical elements for expanding agricultural finance in Nigeria.
If the nation truly seeks to feed its people, boost exports, and build shared prosperity on its journey to a $1 trillion economy, then NIRSAL’s renewed model—anchored on data, discipline, scale, and de-risking—is not just relevant. It is indispensable.
