By Faridat Salifu
The Bank of Agriculture (BoA) has adopted an aggregator-based lending model as part of reforms aimed at improving loan recovery, expanding financial inclusion and ensuring genuine farmers have better access to agricultural finance.
Managing Director and Chief Executive Officer of the bank, Ayo Sotinrin, disclosed the new strategy during an interaction with journalists in Abuja, saying lending through farmer aggregation companies would be more efficient than financing millions of individual smallholder farmers.
He said recovering small loans from widely dispersed farmers has proven costly and operationally difficult, prompting the bank to redesign its financing model.
According to Sotinrin, the bank selected 24 farmer aggregation companies from more than 120 applicants after assessing their operational capacity, governance standards and track records.
He said the aggregators would serve as intermediaries between the bank and farmers, helping to identify genuine beneficiaries, improve monitoring and strengthen loan repayment.
Sotinrin added that the bank plans to expand the network of qualified aggregators through its 110 branches to reach more rural farming communities that are underserved by conventional banking services.
He explained that agricultural loans will no longer be paid entirely in cash, with most facilities converted into farming inputs supplied directly by accredited vendors.
Only about five per cent of each approved loan, he said, will be released as cash to cover logistics and other operational expenses, a measure designed to minimise loan diversion and ensure funds are used for agricultural production.
The BoA chief said the reforms form part of a broader digital transformation programme that includes internet and mobile banking platforms, electronic wallets, digital payment systems, smart point-of-sale devices and artificial intelligence for loan administration and transaction monitoring.
He noted that the bank has also aligned loan repayment schedules with agricultural production cycles to reduce defaults caused by conventional repayment timelines.
Sotinrin disclosed that the bank is implementing the Renewed Hope Agricultural Financing Programme in partnership with the Federal Government and plans to introduce a Guaranteed Minimum Price Programme to protect farmers against post-harvest price fluctuations.
He added that the bank has facilitated the distribution of nearly two million bags of fertiliser and about 34,700 metric tonnes of improved seeds through accredited suppliers while also providing insurance cover for financed agricultural projects against climate-related risks.
Sotinrin said the reforms are intended to build a transparent, technology-driven agricultural finance system that improves productivity, strengthens food security and delivers long-term value across Nigeria’s agricultural sector.
