Project detail - BABBAN GONA FARMER SERVICES NIGERIA

BABBAN GONA FARMER SERVICES NIGERIA

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Who is our client

Established in 2012, Babban Gona (“Great Farm” in Hausa) is a financially sustainable and scalable agricultural enterprise co-owned by its farmers. The company provides cost effective end-to-end services to a network of franchise farmer groups on credit that is repayable at the end of the season. These services include training in sustainable farming, soil analysis, crop insurance, access to storage facilities, including a warehouse receipt program, marketing and distribution of products and access to credit, fertilizer and seeds. Babban Gona proactively supports its farmers to become more resilient to the effects of climate change. In addition to drought tolerant seed varieties and insurance to protect farmers against future environmental uncertainty, it offers trainings on topics like soil structure improvements, water retention and the effects of deforestation. Furthermore, Babban Gona has developed a ‘Last Mile’ business line. This initiative provides Babban Gona members with products (e.g. fertilizer, FMCG goods) to sell to non-Babban Gona members, thus further increasing their net incomes.

Funding objective

FMO has extended a US$ 4 million loan to Babban Gona via its Farmer Finance program. The investment comes from MASSIF, the financial inclusion fund that FMO manages on behalf of the Dutch government. Babban Gona will use the financing to support and expand its innovative farmer service model that has proven to increase smallholders’ yield up to 2 times, and income up to 3.5 times, the national average.

Why we fund this project

Through its model, Babban Gona creates much-needed jobs in northern Nigeria and a path to rise out of poverty and subsistence farming for smallholder farmers. Besides increasing farmer’s yield and income, the Babban Gona franchise is demonstrating that the smallholder segment is a viable model for investment. Over the past 6 years, Babban Gona has provided its services to over 21,000 smallholder farmers while maintaining a 99.9% loan repayment rate. Babban Gona is currently the premier maize producer in Nigeria with a goal to scale and impact one million smallholder farmers by 2025.

Region
Africa
Country
Nigeria
Sector
Agribusiness, Food & Water
Signing date
6/27/2017
Total FMO financing
USD 4.00 MLN
Fund
MASSIF
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B