Technology has aided societal growth over the years , facilitating various evolutions to achieve substantial progress. One notable development is the integration of digital banking as a technological tool that has helped transform agricultural finance in Nigeria.
Fintech platforms have revolutionised how farmers access finance, manage transactions and expand their businesses. This transformation is not only improving the livelihoods of smallholder farmers but also driving growth and efficiency across Nigeria’s agricultural sector.
As digital financial platforms continue to gain popularity nationwide, they are also opening new opportunities for smallholder farmers, agribusinesses, and rural communities. This article explores how digital banking is transforming agricultural finance in Nigeria, focusing on loan accessibility, financial management, and economic inclusion.
Digital banking in Nigeria began in the 1980s with the adoption of electronic payment processes, such as the Magnetic Ink Character Recognition (MICR) cheques. The 1990s ushered in the introduction of Automated Teller Machines (ATMs). In 1993, the Central Bank of Nigeria (CBN) introduced the issuance of smart cards, marking a significant milestone. Guidelines for electronic banking were established in 2003, facilitating the growth of internet banking, point-of-sale (POS) terminals, and mobile banking. The launch of Inter-switch in 2004, along with the Nigerian Inter-Bank Settlement System (NIBSS), enhanced interbank electronic transactions. By the late 2000s, ATMs were the most widely used e-banking channel.
Nigeria has recorded a significant increase in digital access over the years, with approximately 169 million active mobile subscriptions and 142 million internet/data users as of January 2025. The government has launched several initiatives to support digital literacy, including the Digital Nigeria program, which aims to train over 10 million Nigerians in digital skills. Several private sector organisations have launched initiatives aimed at promoting digital literacy and skills development across Nigeria, contributing to broader digital inclusion and economic empowerment.
The Central Bank of Nigeria (CBN) recognises digital banking as a critical tool to foster financial inclusion and reduce poverty, particularly among rural populations whom traditional banking systems may have neglected. Many Nigerian farmers, especially rural farmers, have been excluded from formal financial systems due to a lack of infrastructure, documentation, or collateral. Traditional banks often hesitate to lend to smallholder farmers because of perceived high risks and poor rural infrastructure.
However, the rise of digital and mobile banking platforms is transforming this reality by leveraging mobile technology and fintech innovation to deliver more accessible financial services to farmers. Digital banking is now accessible to farmers in even the most remote communities, thanks to the rising mobile phone penetration in Nigeria.
Farmers can now open savings accounts without physically visiting a bank, receive payments for their produce securely, and make payments for agricultural inputs such as seeds, fertilisers, and equipment through services like mobile money, USSD banking, and agent banking.
Fintech startups also play a vital role by providing user-friendly digital wallets and microloan services specifically designed for smallholder farmers and rural entrepreneurs.
Timi Oke, founder of AgroEknor, describes how digital banking enhances not just financial access but also long-term inclusion and resilience for farmers, which emphasises that digital finance extends beyond facilitating payments; it plays a crucial role in building farmers’ credit histories, supporting recurring input loans, and integrating advisory services into a single platform.
Digital banking in Nigeria offers benefits to farmers who struggle with access to financial aids. Here are some;
Traditional banking systems often require extensive paperwork and collateral barriers many smallholder farmers cannot meet. With digital banking in agriculture, Nigerian farmers can apply for microloans and input financing via mobile apps or USSD codes, get credit scores based on mobile money activity or transaction history, and receive disbursements quickly into digital wallets or accounts. Digital lending platforms such as those supported by the Anchor Borrowers’ Programme (ABP) and fintech-agri collaborations offer short-term financing that aligns with planting and harvesting cycles.
Digital banking also helps make transactions secure and convenient as farmers can purchase seeds, fertiliser, and equipment and receive payments for their produce directly into their digital wallets. Mobile transactions reduce the risks and costs of cash handling, making transactions safer and more efficient.
Digital banking enables farmers to save money and earn interest, thereby supporting long-term planning and financial resilience.
Many digital banking apps offer budgeting, record-keeping, and financial education features, enabling farmers to make more informed decisions and enhance their profitability. This establishes an economic history that enhances creditworthiness and increases eligibility for larger funding options. Many mobile platforms integrate financial literacy resources, teaching farmers to budget, save, and reinvest their profits.
Despite the benefits of digital banking for agriculture in Nigeria, it still faces challenges such as:
However, targeted interventions by stakeholders, mobile network providers, fintech companies, and development partners need to address these issues.
To sustain and scale the impact of digital banking on agriculture, stakeholders should:
Digital banking has the potential to revolutionise agricultural finance in Nigeria, serving as a successful model for financial inclusion and rural transformation with continued collaboration. The introduction of digital banking platforms has significantly improved access to loans and financial tools, promoting inclusion and economic empowerment. These advancements are transforming the future of farming.
As Nigeria continues to explore tech-driven solutions for development, the integration of agriculture with digital banking offers a promising path toward sustainable growth.
