Babban Gona Farmer Services Nigeria Limited
Status: Completed investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer?
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, crop insurance, access to storage facilities, including a warehouse receipt program, marketing and distribution of products and access to credit, fertilizer and seeds. 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.
What is our funding objective?
After a first loan provided to Babban Gona in 2017, the new facility (up to USD 15 million – consisting of a committed and an uncommitted facility) will allow Babban Gona to further expand its innovative farmer service model which is estimated to increase smallholders’ yields to up to 2 times the national average.
Why do we fund this investment?
Through its model, Babban Gona creates much-needed jobs in northern Nigeria and a path out of poverty and subsistence farming for smallholder farmers. Over the past 9 years, Babban Gona has provided its services to over 200,000 smallholder farmers while maintaining a 99% loan repayment rate, showcasing that smallholder farmers can be invested in in a financially sustainable way. Babban Gona is currently the premier maize producer in Nigeria. Its goal is to reach one million smallholder farmers by 2025.
What is the Environmental and Social categorization rationale?
Potential Environmental and Social(E&S) risks associated with Babban Gona’s operations include labor and working conditions (including supply chain labor risks), occupational health and safety, climate related risks, transportation, food safety, pesticide management, security management and deforestation/habitat destruction. The applicable standards include PS1 to PS4 and PS6 (supply chain), World Bank General Environment, Health and Safety (EHS) Guidelines, and Annual Crop Production are applicable. Northern Nigeria is characterized by a challenging security environment resulting in an elevated contextual risk. Based on the identified Environmental and Social risks and high contextual risk, the E&S project categorization is B+.
More investments
| Date | Total FMO financing |
|---|---|
| 4/15/2021 | USD 4.00 MLN |
- Region
- Africa
- Country
- Nigeria
- Sector
- Agribusiness, Food & Forestry
- Publication date
- 10/13/2021
- Effective date
- 3/30/2022
- End date
- 4/8/2026
- Total FMO financing
- USD 10.00 MLN
- Funding
- 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+