Professional Assessment of Agricultural Value Chain Financing in Kano State

Value chain financing integrates credit into the agricultural production-to-market continuum, and professionally assessing its effectiveness in Kano State provides evidence for improving agricultural finance in North West Nigeria. This study professionally assessed agricultural value chain financing for tomato, groundnut, and onion value chains in Kano, Bichi, and Rano Local Government Areas, Kano State. A mixed assessment methodology combined structured interviews with 25 value chain actors (input suppliers, farmers, processors, traders) and 10 financial institutions, documentary review of Agricultural Value Chain Financing programme records, and benchmarking against NIRSAL agricultural finance standards. Assessment confirmed that value chain credit penetration was only 22 percent among surveyed value chain actors. Warehouse receipt financing was operationally available but used by fewer than 5 percent of eligible operators due to lack of awareness. Financial institution risk assessment capacity for agricultural borrowers was limited in 7 of 10 assessed institutions. The tomato value chain showed the highest financing need relative to current access, with an estimated N4.2 billion annual financing gap. Recommendations include a Kano State Agricultural Value Chain Finance Technical Assistance Programme, NIRSAL-guaranteed lending expansion to tomato and onion processors, mandatory value chain finance training for agricultural bank officers, and a Kano State produce warehouse network to enable warehouse receipt financing expansion.

Keywords: agricultural value chain financing, Kano State, NIRSAL, warehouse receipt, agricultural credit