19 Jul 2017 - 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.
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.
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. For its innovative approach, Babban Gona received the 2017 Skoll Award for Social Entrepreneurship.
“I strongly believe Babban Gona is the solution to Nigeria’s rural development challenges and will play a critical role as an economic buffer, to curb the spread of insecurity,” stated His Highness Muhammad Sanusi II CON, the Sarkin (Emir) Kano, Babban Gona Board Chairman, former Governor of the Central Bank of Nigeria and Times 100 most influential people in the world.
Suzanne Gaboury, Director Agribusiness, Food & Water at FMO said: “We are proud of our partnership with Babban Gona which will help farmers in northern Nigeria to access necessary skills, markets and services, and significantly improve their livelihoods.”
Kola Masha, Babban Gona’s Managing Director, noted: “At Babban Gona, we believe everyone deserves a secure future and to secure this future we must end insecurity. To end insecurity, Babban Gona is working tirelessly to unlock the potential of agriculture as a job creation engine for millions of youth across Africa. Partnering with FMO will enable us to achieve this goal and catalyze our impacting the lives of 1 million farmers by 2025.”
Agribusiness, Food & Water is a key sector for FMO. In the coming decades, the global population will increase to over 9 billion with fewer resources available. FMO has made Agribusiness a priority to help meet these challenges by focusing investments across the value chain: (I) enhancing food security, (II) supporting sustainability and (III) promoting inclusive development in an environmentally viable and socially inclusive manner. FMO’s Farmer Finance program focusses on projects that enhance the livelihoods of smallholder farmers.
Article originally published on the FMO website.