By Stella Odueme
The National Agricultural Development Fund (NADF) has commenced the validation of its proposed Non-Interest Finance Framework and Guidelines as part of efforts to expand access to agricultural financing and support the Federal Government’s food security agenda.
The Executive Secretary/Chief Executive Officer of NADF, Mohammed Ibrahim, disclosed this on Tuesday at a Strategic Roundtable and Validation Session on the proposed framework and guidelines.
Ibrahim said the initiative was designed to provide farmers, agribusinesses and other stakeholders across the agricultural value chain with more diverse and innovative financing options.
He explained that non-interest finance had become an important component of Nigeria’s financial system, offering ethical, asset-backed and risk-sharing models that could complement conventional financing.
“Our objective is not simply to introduce another financing framework. It is to broaden the financing ecosystem for agriculture by ensuring that every credible financing option is available to Nigerian farmers, agribusinesses, and other value chain actors,” he said.
According to him, the proposed framework would establish a structured and transparent basis for implementing agricultural interventions through licensed Non-Interest Financial Institutions, while providing clear governance, operational and Shari’ah compliance standards.
The NADF chief executive said the documents were deliberately presented as drafts to allow stakeholders to examine their contents, challenge existing assumptions and contribute technical and practical inputs before finalisation.
“Today’s gathering marks an important milestone in that journey,” Ibrahim said, urging participants to critically review the documents and bring their practical experiences to bear on the validation process.
He stressed that the success of the initiative would depend not only on the quality of the framework but also on effective partnerships and a shared commitment to implementation.
Also speaking, the Director of the Development Finance Advisory Department of the Central Bank of Nigeria (CBN), Dr Paul Oluikpe, said there was still substantial work to be done to bridge Nigeria’s agricultural financing gap.
Oluikpe recalled that the CBN played a role in the early development of NADF, including providing conceptual support in shaping the institution’s direction.
He said the financing needs of Nigeria’s agricultural sector remained substantial, given the country’s population, the importance of agriculture to the economy and the challenges confronting the sector.
According to him, the financing gaps cut across the entire agricultural value chain, including production, infrastructure, mechanisation and other critical areas.
He said the Federal Government’s food security objective had further underscored the importance of institutions such as NADF in mobilising resources and addressing financing gaps within the sector.
Oluikpe noted that the CBN’s Development Finance Advisory Department had shifted away from direct developmental interventions, making institutions such as NADF increasingly important in addressing financing needs.
He welcomed the proposed non-interest finance framework, describing it as an opportunity to bring an often-overlooked financing model into the mainstream of agricultural development.
“With the non-interest finance framework that is being looked at and validated today, it’s really a key opportunity for us to bring in that particular dimension, because oftentimes it’s overlooked,” he said.
Oluikpe urged NADF to leverage the expertise of non-interest finance specialists and other stakeholders to ensure that the proposed framework was suitable for Nigeria’s financial environment.
He also expressed the CBN’s support for the initiative and said the apex bank looked forward to the completion of the final framework.
The Deputy Chairman of the CBN’s Financial Regulation Advisory Council of Experts (FRACE), Professor Bashir Aliyu Umar, said the proposed framework aligned with broader efforts to promote financial inclusion and widen access to finance.
Umar said incorporating non-interest financing into the formal financial system was consistent with ongoing financial-sector development efforts, noting that some development finance institutions had introduced or were considering non-interest financing windows.
He said the NADF initiative could provide more Nigerians, particularly those in the agricultural sector, with access to formal financing.
“What we are witnessing today is also following this trajectory of financial inclusion and easing access to finance and having a level playing field and even developmental perspective for the whole country whereby no segment of society is left out,” Umar said.
He added that non-interest financing could complement existing funding mechanisms and support resource mobilisation for agriculture, which remains a major source of livelihood for Nigerians.
Umar also emphasised the importance of broad stakeholder participation in the validation exercise, saying contributions from regulators, development finance institutions, financial-sector operators and academics would strengthen the proposed framework.
Providing an overview of the initiative, NADF’s Head of Investment, Olalekan Alabi, said the proposed framework and guidelines were intended to create a structured mechanism for deploying non-interest financing to eligible agricultural activities and value-chain interventions.
Alabi said the framework would define the institutional and operational architecture for NADF’s non-interest finance activities, including governance structures, institutional responsibilities, financing models, risk management, compliance and control mechanisms.
He explained that the accompanying guidelines would translate the principles contained in the framework into practical procedures for implementing specific financing interventions.
“Together, the Framework and Guidelines are expected to provide clarity on how NADF’s non-interest financing interventions will be structured, assessed, approved, implemented, monitored and reported,” he said.
Alabi said the validation exercise was designed to determine whether the proposed framework could function effectively in practice, rather than serve as a mere formal approval process.
“We are not here simply to confirm that the documents have been prepared. We are here to test their technical robustness and practical applicability,” he said.
He identified the key areas for review as the institutional architecture, financing structures, stakeholder responsibilities, risk management and controls, Shari’ah and regulatory requirements, as well as the practicality of implementation.
According to him, stakeholders were expected to identify gaps, inconsistencies, overlaps and provisions requiring clarification before the documents were finalised.
“Our objective is to have a set of Framework and Guidelines that are clear, technically sound, operationally practical, appropriately governed and capable of supporting NADF’s non-interest agricultural financing interventions,” Alabi said.
He added that NADF’s Investment Department would document the observations and recommendations generated during the session and incorporate agreed inputs into the finalisation process.
The validation session attracted representatives of government institutions and regulatory agencies, development partners, non-interest finance experts, financial institutions and other stakeholders in the agricultural and financial sectors.
