The National Agricultural Development Fund (NADF) has started validating its proposed Non-Interest Finance Framework and Guidelines. This move aims to increase access to agricultural finance and support the Federal Government's food security objectives. NADF's Executive Secretary/Chief Executive Officer, Mohammed Ibrahim, disclosed this at a Strategic Roundtable and Validation Session on the proposed framework and guidelines. The initiative seeks to provide diverse and innovative financing options for farmers, agribusinesses, and other actors across the agricultural value chain.
According to Mohammed Ibrahim, non-interest finance has become an essential component of Nigeria's financial system. It offers ethical, asset-backed, and risk-sharing financing models that complement conventional finance. The proposed framework will provide a structured and transparent basis for delivering agricultural interventions through licensed Non-Interest Financial Institutions. It will also institutionalize governance, operational, and Shari'ah compliance standards. Ibrahim emphasized that the objective is to broaden the financing ecosystem for agriculture.
The NADF boss said the documents were presented as drafts to allow stakeholders to scrutinize and contribute their expertise before finalization. He urged participants to examine the draft documents critically, challenge assumptions where necessary, and share practical experiences. Ibrahim added that the success of the initiative depends on partnerships and collective commitment to its implementation. The validation session marks an important milestone in this journey.
Dr. Paul Oluikpe, Director of the Development Finance Advisory Department of the Central Bank of Nigeria (CBN), noted that significant work remains to be done to improve access to agricultural finance in Nigeria. He recalled that the CBN was involved in the early development of NADF and provided conceptual support in shaping its direction. Oluikpe said the scale of Nigeria's agricultural financing needs is enormous, considering the country's population and the importance of agriculture to the economy.
Oluikpe welcomed the proposed non-interest finance framework, describing it as an opportunity to bring an often-overlooked dimension of agricultural financing into the mainstream. He urged NADF to draw on the expertise of non-interest finance specialists and other stakeholders at the validation session. This will ensure that the framework is appropriate for Nigeria's financial system. The CBN expressed support for the initiative and looks forward to the final document.
Professor Bashir Aliyu Umar, Deputy Chairman of the Central Bank of Nigeria's Financial Regulation Advisory Council of Experts (FRACE), said the proposed framework is consistent with Nigeria's efforts to promote financial inclusion and expand access to finance. Umar noted that several development finance institutions have introduced or are considering non-interest finance windows. He stressed the importance of the validation process, which will help strengthen the proposed framework.
The proposed framework and guidelines are designed to establish a structured mechanism for deploying non-interest financing to eligible agricultural activities and value-chain interventions. NADF's Head of Investment, Mr. Olalekan Alabi, said the framework will set out the institutional and operational architecture for NADF's non-interest finance activities. The validation session is an opportunity to test whether the proposed framework can work effectively in practice.
Key points
- The National Agricultural Development Fund (NADF) is validating its proposed Non-Interest Finance Framework and Guidelines to increase access to agricultural finance in Nigeria.
- The proposed framework aims to provide a structured and transparent basis for delivering agricultural interventions through licensed Non-Interest Financial Institutions.
- The initiative seeks to provide diverse and innovative financing options for farmers, agribusinesses, and other actors across the agricultural value chain.
