Nigeria’s agricultural economy has long been caught between importance and exclusion: the sector supports millions of jobs, contributes materially to national output and underpins food security, while many smallholder farmers remain cut off from formal credit, insurance and other suitable financial products.
For years, banks viewed these farmers as difficult customers to finance because they often lacked collateral, dependable data and organised records. Across Africa, only about 6% of smallholder farmers or rural households are estimated to obtain formal credit, although the figure differs considerably depending on the country and the data used. That gap is now prompting parts of Nigeria’s banking sector to reconsider how agricultural finance should work.
Some lenders are moving past conventional loan products and taking on a wider ecosystem-building role. Their approach combines capital, digital tools, climate information and support for startups to address the deeper weaknesses holding agriculture back. First City Monument Bank’s agritech initiative illustrates that change. Launched in 2018 to find promising technology startups, the programme has developed into a wider innovation network involving entrepreneurs, investors, development agencies and technology providers.
Information is at the heart of the new model. Agritech businesses are using weather data, soil analysis, mobile applications and digital transaction or farm records to make agricultural activity less uncertain. The broader objective is to make farming easier to observe, quantify and finance.
The development reflects a wider change in African agriculture. Banks are increasingly recognising that farmer financing cannot be separated from deficits in infrastructure and information. In many rural areas, the lack of trustworthy agricultural data creates a barrier to lending well before questions about repayment emerge. Technology is being deployed to close that gap.
FCMB has maintained its backing for agritech companies using technology to tackle practical agricultural problems and provide farmers with accessible services in local languages, including Hausa, Yoruba and Igbo. This is more than a matter of convenience. Many smallholders remain outside digital systems designed primarily for English speakers, so delivering advice and services in indigenous languages could raise adoption, broaden financial inclusion and improve productivity. It also forms part of a broader effort to adapt technology to local conditions instead of simply importing ready-made systems.
Climate risks are also changing the priorities of agricultural finance. Regenerative agriculture, resilience to extreme weather and sustainability are moving from the margins of environmental policy into the centre of financial decision-making. Plans highlighted by FCMB include expanding into climate-informed farming and combined insurance products designed to shield producers from shocks that can destroy livelihoods and deter future investment.
The sector’s ambitions are becoming more regional as well. A number of Nigerian agritech companies are being prepared to enter East African markets such as Uganda and Kenya. Their potential expansion indicates that these businesses are beginning to develop products, operating methods and agricultural services for markets beyond Nigeria, rather than focusing only on domestic survival.
The stakes are high. Population growth, climate disruption, insecurity and fragile rural-finance systems are putting mounting pressure on food systems across Africa. Public authorities are unlikely to resolve these problems alone, increasing the importance of cooperation among banks, startups and development organisations.
The next test will be whether innovation can reach scale. Many agricultural programmes generate encouraging pilot results but fail to progress beyond a small number of isolated successes. Lasting results will require better infrastructure, supportive public policy, stronger digital skills and sustained efforts to earn the confidence of farming communities.
What is increasingly evident is that agriculture has become more than a discussion about cultivation. It is now also a technology issue, a financial-sector issue and, with growing urgency, a matter of strategic economic security. Banks are steadily placing themselves at the centre of that transformation.
