EDFI AgriFI invests EUR 5 million in Babban Gona to bring entrepreneurship to Nigerian agriculture
AgriFI’s investment is expected to catalyze an additional EUR 15 million in senior debt, resulting in a total of EUR 20 million put towards creating sustainable employment in agriculture for one million individuals by 2025.
EDFI AgriFI, the EU-funded Agriculture Financing Initiative, committed EUR 5 million to Babban Gona, an agricultural enterprise co-owned by the smallholder farmers it supports with a holistic range of services on credit. Babban Gona’s services namely include education and training in sustainable farming practices, provision of high quality affordable agricultural inputs, provision of storage facilities, as well as marketing and distribution support.
Established in 2012, the Babban Gona franchise has grown fast. Its innovative business model has offered some 70,000 smallholder farmers with tailored technologies and facilities enabling them to optimize their yields, productivity, and income. It also became the largest maize producing entity in Nigeria in 2016. By supporting its scale up, AgriFI will contribute to the recruitment of 12,000 additional farmers; the cultivation of 10,000 additional ha, and the production of some 40,000 MT of maize per year.
“We are very proud to back Babban Gona’s social business. Not only does the company support subsistence to commercial transition in rural Nigeria, it also seeks to leverage agribusiness to tackle insecurity in the country, rooted in entrenched levels of youth unemployment. AgriFI’s financing will support the expansion of Babban Gona’s innovative farmer service model that has proven to increase smallholders’ yield up to 2 times, and their income up to 2.5 times the national average,” explained Dimitry Van Raemdonck, EDFI AgriFI Manager.
Given the perceived trade-off between societal and financial returns, social entrepreneurs often struggle to raise capital to expand their activities. EU blended finance instruments such as AgriFI can therefore play a crucial role in catalysing extra funding and supporting the company’s ambitions.
”It is a great opportunity to partner with EDFI AgriFI on this journey towards creating sustainable employment for youth and ending insecurity for all in Nigeria. With EDFI AgriFI’s transformational financial support, we can expand our reach to empower more individuals at the bottom of the pyramid and protect the legacy of future generations. We now drive towards impact, hand-in-hand with EDFI AgriFI,” explained Kola Masha, Babban Gona Managing Director.