Agricultural Finance and Credit Management for Smallholder Farmers in Northern Nigeria

This study examines agricultural finance access patterns and credit management practices among smallholder farmers in northern Nigeria, with a focus on the North West and North Central zones. Agricultural finance is widely recognised as a binding constraint on smallholder productivity in Nigeria, and northern states, with their large farming populations and low financial sector penetration, face particularly acute agricultural finance challenges. This study uses a mixed-method design, combining surveys of 240 smallholder farmers in Sokoto, Kebbi, and Kogi States with interviews of 30 agricultural lending officers from the Bank of Agriculture, microfinance institutions, and cooperative societies. Credit access rates, credit amounts, terms, repayment performance, and credit utilisation patterns are assessed. Findings reveal that formal credit access reaches only 18 percent of sampled farmers, with cooperative credit and informal moneylender credit serving the majority of credit-accessing farmers. Credit amounts are insufficient for full seasonal input purchase in most cases. Repayment rates are higher for cooperative credit than for Bank of Agriculture loans, reflecting stronger social accountability mechanisms. Credit misallocation to non-agricultural uses is common when supervision is weak. The study concludes that agricultural finance in northern Nigeria requires a combination of institutional strengthening, product innovation, and borrower financial literacy improvement. It recommends credit-plus programmes that combine finance with technical support and financial management training.

Keywords: agricultural finance, credit management, smallholder farmers, northern Nigeria, Bank of Agriculture.