Research Article

Effects of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending on the Performance of the Agricultural Sector in Nigeria

Patricia Onyemowo Agbo1*, Joshua Chibi Dariye1, Maria Ayaiye Okorie1, Taiya Haziel Mbasti2
1 Department of Banking and Finance, University of Jos, Nigeria
2 Department of Accounting, Adamawa State University, Mubi, Nigeria
* Corresponding author: onyemowoa@gmail.com
Published: Dec, 2025
DOI: 10.67862/jbfr.2025.ckb99hv3
Pages: 108-119
Views: 102
Downloads: 42

Abstract

Nigeria’s agricultural sector is central to economic development, food security, and employment generation, yet its growth has been persistently constrained by limited access to credit. To address this challenge and reduce the risks associated with agricultural lending, the Central Bank of Nigeria established the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in 2011 to stimulate increased financial support for agribusinesses. This study examined the effect of NIRSAL on the performance of the agricultural sector in Nigeria. The study adopted an ex-post facto research design and utilised time-series secondary data obtained from the Central Bank of Nigeria, the National Bureau of Statistics, and the Federal Ministry of Agriculture and Rural Development for the period 2013–2024. Data analysis involved the use of descriptive statistics and a range of econometric diagnostic tests, including the Augmented Dickey-Fuller unit root test, tests for multicollinearity, serial correlation, heteroskedasticity, normality, and model stability. These analyses were conducted using E-Views 10 statistical software. The Ordinary Least Squares (OLS) technique was employed to estimate the model, while multiple regression analysis was used to test the formulated hypotheses. The results indicate that NIRSAL has a statistically significant and positive impact on agricultural productivity and financial inclusion in Nigeria. Based on these findings, the study recommends that the Federal Government, through the Ministry of Agriculture and Rural Development, should strengthen institutional, operational, and information-sharing collaboration between NIRSAL and state-level agricultural extension services. This would ensure that recipients of NIRSAL-supported loans benefit from regular capacity-building programmes, including at least quarterly training sessions, complemented by monthly or bimonthly field supervision and ongoing technical support on modern and sustainable agricultural practices aligned with the agricultural production cycle.

Keywords

NIRSAL Agricultural Lending Agricultural performance

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How to Cite

Agbo, P. O., Dariye, J. C., Okorie, M. A., & Mbasti, T. H. (2025). Effects of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending on the Performance of the Agricultural Sector in Nigeria. Journal of Banking and Finance Research, 1(1), 108-119. https://doi.org/10.67862/jbfr.2025.ckb99hv3

P. O. Agbo, J. C. Dariye, M. A. Okorie, and T. H. Mbasti, "Effects of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending on the Performance of the Agricultural Sector in Nigeria," Journal of Banking and Finance Research, vol. 1, no. 1, pp. 108-119, December 2025. doi: 10.67862/jbfr.2025.ckb99hv3

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