The Bank of Agriculture (BoA) has received a total of ₦550 billion from the Federal Government to expand financing for smallholder farmers and support efforts to stabilise food prices across the country.
The Managing Director of the bank, Ayotunde Sotinrin, disclosed this during an interactive session with agricultural correspondents, explaining that the funding forms part of the Renewed Hope Smallholder Support and Value Chain Programme.
According to him, ₦250 billion of the funding is dedicated to financing smallholder farmers through technology-driven systems and improved controls, while another ₦300 billion is earmarked for interventions aimed at maintaining affordable food prices.
Sotinrin explained that BoA does not provide financing directly to individual farmers. Instead, it works through farmer aggregation companies, including AFEX, ThriveAgric and Arziki Noma, which help organise farmers and reduce the risks associated with loan recovery.
On the Guaranteed Minimum Price initiative, he said the bank had been mandated to purchase agricultural produce from farmers during harvest periods and release the commodities into the market when necessary to prevent excessive increases in food prices.
He disclosed that about 500,000 farmers had already benefited from the pilot phase of the programme. To protect the financing against weather-related risks, the bank has also allocated about four per cent of the total funding to insurance.
Sotinrin said BoA had completely digitised its farmer-financing process, including the introduction of a dedicated bank card and wallet system. Through the system, government agencies can credit farmers' wallets with fertiliser, seeds and other inputs, which they can redeem at designated collection centres using point-of-sale terminals.
The bank has also introduced a Know Your Farmer (KYF) system, which uses artificial intelligence to automate payments and monitor transactions involving farmer aggregation companies. According to the BoA chief, the system is designed to eliminate manual verification and improve transparency in transactions involving millions of farmers.
He said the reforms became necessary after he assumed office about a year ago and discovered that the institution was functioning more like a government department, with outdated facilities and systems.
Sotinrin said the bank had since embarked on restructuring, recapitalisation and a renewed focus on its core mandate of providing sustainable agricultural financing.
He identified the sheer number of smallholder farmers in Nigeria as one of the major challenges facing the sector, noting that financing an estimated 70 million farmers directly would be impractical. This, he explained, informed the decision to work through organised farmer aggregators.
BoA Targets Five Million Tonnes Of Ginger Production. The Managing Director also highlighted the bank's intervention in the ginger sector, particularly its response to the ginger blight disease that affected farmers in parts of the country. He said about 4,000 affected farmers had received disease-free ginger rhizomes under the Ginger Revitalisation Programme.
Under the initiative, farmers are expected to return three bags of ginger for every bag received. The returned produce is subsequently used by tissue culture laboratories to produce millions of disease-free seedlings.
Sotinrin said the bank's long-term ambition was to increase Nigeria's ginger production from about 500,000 tonnes to five million tonnes annually, while raising revenue from approximately $200 million to $2 billion.
He added that the programme would be expanded beyond the traditional ginger-producing states of Kaduna, Nasarawa and Plateau.
2,000 Tractors Planned For 1.2 Million Farmers. On agricultural mechanisation, Sotinrin clarified that BoA would not distribute tractors directly to farmers.
Instead, the tractors would be provided to mechanisation service providers, who would repay the loans from income generated through services rendered to farmers. He said the bank's target was to deploy 2,000 tractors capable of providing mechanisation services to approximately 1.2 million farmers.
To tackle post-harvest losses, the bank is also introducing battery-powered cargo e-tricycles capable of transporting between 2,000kg and 3,000kg of agricultural produce from farm gates to warehouses.
The BoA chief further disclosed plans to establish one-stop agricultural service hubs in farming communities. The centres are expected to offer tractor booking, input sales by original equipment manufacturers, produce aggregation and banking services.
According to him, the hubs will bring essential agricultural services closer to farmers while also helping the bank build reliable credit profiles for beneficiaries.
Sotinrin said the transformation was part of BoA's transition into what he described as “Bank of Agriculture 2.0,” with a focus on financing, technology and addressing structural challenges in the agricultural sector.
He stressed that the institution was not designed to operate as a charity, but to create sustainable economic impact through profitable and responsible financing.
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