Managing Director/Chief Executive, Bank of Agriculture (BoA), Mr. Ayo Sotinrin, said the institution is abandoning obsolete lending practices in favour of a technology-driven financing model designed to reach millions of genuine farmers, improve food production and safeguard public funds.
Speaking during an interaction with journalists in Abuja, Sotinrin said the bank’s renewed strategy is focused less on disbursing loans and more on delivering measurable outcomes that directly improve the livelihoods of Nigerians while addressing structural bottlenecks across the agricultural value chain.
He stressed that the country’s foremost agricultural development bank is repositioning itself as a commercially-run development finance bank rather than a government agency, insisting that although government owns the bank, it operates as a limited liability company with a developmental mandate.
According to him, the transformation programme rests on three major pillars – restructuring the institution, recapitalising it to strengthen lending capacity and redesigning agricultural financing to better serve farmers and agribusinesses.
Sotinrin disclosed that when he assumed office just over a year ago, he met an institution weakened by years of neglect, outdated technology and inefficient processes.
He said many branches still operated with obsolete computer systems while several banking processes remained manual, making efficient service delivery almost impossible.
Rather than merely modernising existing systems, he explained that the bank opted for a complete digital overhaul.
To achieve this, BoA constituted a Technical Working Group led by Ernst & Young, supported by chief technology officers from some of Nigeria’s biggest banks, to design a modern digital banking architecture.
The reforms, he said, have culminated in the deployment of core banking applications, internet and mobile banking platforms, digital payment systems, ATM cards embedded with customers’ identity information, electronic wallets and smart point-of-sale devices capable of opening accounts, verifying identities and processing agricultural input transactions.
According to him, digitisation will significantly improve transparency while reducing fraud and administrative bottlenecks that have historically plagued intervention programmes.
He explained that the new system enables government interventions such as fertiliser, seeds and agrochemicals to be loaded electronically into farmers’ wallets, ensuring beneficiaries collect only approved inputs from accredited suppliers.
Sotinrin said this would eliminate leakages, diversion and the activities of middlemen that have often undermined agricultural support programmes.
The BoA boss said the institution had also integrated Artificial Intelligence (AI) into its operations to automate account monitoring, payment reconciliation and loan administration.
He noted that AI would replace labour-intensive manual verification processes, allowing the bank to manage transactions involving thousands of farmers with greater efficiency.
A major shift in the bank’s lending strategy, according to him, is the decision to finance farmers largely through carefully selected farmer aggregation companies instead of lending directly to millions of individual smallholders.
He noted that recovering small loans from millions of dispersed farmers is both expensive and operationally unsustainable.
By leveraging aggregators with established relationships in farming communities, BoA expects to deepen financial inclusion while improving loan recovery and programme monitoring.
Sotinrin disclosed that following a rigorous screening process, the bank selected 24 aggregation companies from over 120 applicants based on operational capacity, governance standards and proven track records.
He said the bank also planned to strengthen more aggregators across the country using its network of 110 branches to ensure wider geographic coverage.
According to him, the approach allows the bank to penetrate remote farming communities that conventional banking channels rarely reach.
He maintained that the objective is to identify genuine farmers rather than politically-connected beneficiaries.
To further safeguard public funds, Sotinrin explained that BoA no longer disburses agricultural loans entirely in cash.
Instead, approved loans are largely converted into farming inputs procured directly from accredited suppliers, while only about five per cent of the facility is released to beneficiaries as working capital for logistics and related expenses.
He said the arrangement ensures loans are used strictly for farming activities rather than diverted into unrelated businesses or financial investments.
The MD said the bank had also redesigned its loan products to reflect agricultural production cycles instead of imposing conventional repayment schedules that often force farmers into default before harvest.
He disclosed that one of the flagship initiatives under the new strategy is the Renewed Hope Agricultural Financing Programme, developed in partnership with the Federal Government to support smallholder farmers across various agricultural value chains.
According to him, despite fiscal constraints, President Bola Tinubu approved funding for the programme because of its potential to improve food production and rural livelihoods.
Sotinrin said BoA is currently implementing pilot phases of the initiative to identify operational gaps before nationwide expansion.
Beyond financing production, he revealed that the bank is introducing a Guaranteed Minimum Price Programme aimed at protecting farmers against sharp declines in commodity prices after harvest.
Under the scheme, farmers will receive price support whenever prevailing market prices fall below production costs, while the bank subsequently markets the commodities to processors and manufacturers to recover its investment.
He described the initiative as a market stabilisation mechanism rather than a subsidy programme, noting that it protects both producers and consumers by reducing extreme price volatility.
Responding to questions on programme implementation, Sotinrin said the bank had so far facilitated the distribution of nearly two million bags of fertiliser as well as about 34,700 metric tonnes of improved seeds to participating farmers.
He clarified that the bank does not directly procure or distribute inputs but finances qualified farmers while accredited suppliers provide certified products based on approved loan packages.
On concerns about reaching farmers in remote communities, the BoA chief insisted that the aggregation model offers broader penetration than direct lending.
He said many partner aggregators already operate across previously underserved rural locations and possess stronger grassroots networks than the bank itself.
According to him, the institution has carried out several field activities nationwide, even though many of them have received limited media attention.
Addressing climate-related risks, Sotinrin said the bank has adopted comprehensive insurance coverage for financed agricultural projects to protect farmers and the institution against losses arising from adverse weather conditions and other unforeseen events.
He added that discussions are also ongoing with security agencies to strengthen protection for farming communities affected by insecurity, including developing local security collaboration mechanisms involving farmers themselves.
Sotinrin acknowledged that the BoA cannot finance every farmer in the country but maintained that strategic interventions, efficient capital deployment and modern technology could substantially improve agricultural productivity and strengthen the country’s food system.
He said the bank’s objective is not simply to increase loan disbursements but to build a transparent, sustainable agricultural finance ecosystem capable of supporting production, improving food security and delivering lasting economic impact.
James Emejo
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