Islamic Agricultural Financing (IAF): An Option for the Developing Agricultural Sector in Nigeria


  • Bello Sani Yahuza International Islamic University Malaysia, Malaysia
  • Akhtarzaite Binti Abdul Aziz International Islamic University Malaysia, Malaysia



Islamic agricultural financing, Agricultural credit, Economic diversification


Nigeria has great land, water, labor, and market potentials. But the perceived failure of the existing credit facilities to meet the demand-supply gap of agricultural sector credit inhibits the sector’s performance. This causes serious concern to The Federal Government’s policy making, owing to some technical, resource, socio-economic, organizational, and religious constraints. It calls for policy shift toward economic diversification. This paper aims at underscoring the potential of Islamic agricultural financing as an innovative mechanism for enhancing agricultural performance. The paper uses secondary data covering 2013 to 2018 sourced from the Central Bank of Nigeria (CBN) and other relevant sources to analyze the trends of conventional agricultural credit performance. The paper, using qualitative method with exploratory content analysis, finds that conventional agricultural credit falls short as it fails to bridge the demand-supply gap of financial resources which adversely cause food price inflation and high food imports, which increases poverty, hunger and unemployment owing to the above-mentioned constraints. Hence, the paper recommends that Nigeria as an Islamic Development Bank (IsDB) member country operating the Non-Interest (Islamic) financial system, should properly fully implement the integrated Islamic agricultural financing modes of its newly introduced agricultural intervention schemes 2020, supported with effective legal and regulatory framework, vibrant market structure for enhancing financial inclusion and economic diversification for achieving micro and macroeconomic optimum growth and steady development of the sector in Nigeria, as successfully implemented in Malaysia, Indonesia, and Sudan.


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How to Cite

Sani Yahuza, B., & Binti Abdul Aziz, A. . (2023). Islamic Agricultural Financing (IAF): An Option for the Developing Agricultural Sector in Nigeria. International Journal of Economics, Management and Accounting, 31(1), 23–52.