Babban Gona will administer a $10 million Citigroup Inc. financing to about 41,000 small farmers in the West African nation, it says in an emailed statement.
Even though agriculture contributes a third of Nigeria’s economic output, it attracts less than 5% of bank loans.
The facility will enable farmers improve income by 350% per hectare, said Babban Gona, a novel business model in Nigeria that helps farmers hold onto their crops for much longer through comprehensive support including better storage facilities.
The organization has extended nearly $200 million in loans to over 280,000 smallholder farmers, since its establishment in 2012.
The funding forms part of Citigroup’s $1 trillion global commitment to sustainable financing by 2030.
The bank will do more and partner with more organizations once projects like that of Babban Gona is successful, Ireti Ogbu, chief executive officer of Citigroup Inc.’s Nigerian unit said.
“There are a pipeline of projects under consideration,” she said.
Citigroup plans to use its worldwide network to help fintechs tap into the global financial market over the next few years.
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Located in Nigeria in the heart of West Africa, Babban Gona uses a unique technology platform to make farming more profitable to create millions of youth jobs, interrupting the root causes of violence, stimulating strong economic growth, and alleviating the migration problem.
Babban Gona was co-founded in 2010 by Kola Masha, a Harvard and MIT trained Nigerian who first worked as technical assistant to the former minister of Agriculture and who is now head of the AfDB.
Babban Gona which means “great farm” in hausa, is dedicated to empowering small farm holders to transition from subsistence farming to commercial farming. Masha accomplished this by franchising thousands of farmer cooperatives across Northern Nigeria.
“We deliver an integrated package of agronomic and financial training, farm inputs, and marketing services on credit to each cooperative, enabling its members to increase the productivity and profitability of their farm enterprise,” Masha said.
The company also disburses long-term loans to small farmers. Since the firm started operating, thousands of farmers have doubled their yields and tripled their incomes, thereby improving their livelihoods and that of their families.
“They can send more children to school, access improved nutrition especially for children and babies, afford mothers the funds to give birth in a hospital, and purchase home solar systems to ensure reliable clean power,” Masha said.
“In terms of education, a Babban Gona survey in 2016 showed that 90 percent of members were utilizing their increased net income to invest in their children’s education, by either sending more children to school or moving their children to a higher quality school,” he added.
Source: Businessday.ng
