Projects

Babban Gona

Period

2020

Country

Nigeria

Sector

Agriculture

Financial facility

AgriFI

AgriFI invested EUR 5 million in the Babban Gona franchise, an investment expected to attract senior debt and reach the ambition to support one million smallholder farmers in Nigeria.

Project overview

Babban Gona (“Great Farm” in Hausa) is an agricultural, for-profit, socially responsible private company which has developed an innovative large-scale agricultural franchise model in northern Nigeria, through which it provides a wide range of tailored end-to-end services to its network of smallholder members. The business model of Babban Gona consists of delivering training and development, financial credit, agricultural inputs, and output harvest and marketing services. The company started operations in 2012.

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Funding objective

AgriFI provided junior debt funding which is especially important to Babban Gona as it allows them to crowd in additional senior debt while maintaining robust financial ratios. AgriFI investment should help Babban Gona to raise € 15 million in senior debt, supporting the company in doubling the number of  smallholder farmers. AgriFI’s contribution will finance the enrolment of additional farmers, leading to an increase in the cultivation area as well as in maize production.

Investment rationale

AgriFI is keen to support this project promoting sustainable smallholder farming and helping farmers to increase their productivity and profitability. Babban Gona integrates smallholder farmers in a consolidated and functional value chain where it provides a holistic package of inputs and services to support its members in attaining yields above 2x the national average, improve the quality of their crop, reduce the cost of their inputs, and obtain premium prices at the point of sale. All of these factors combine to ultimately increase member net income over 3x the national average.

Key Indicators

Financial Instrument

Junior debt

Amount

€ 5 million

Year

2020

Targeted impact – Smallholder farmers

48,000

Targeted impact – Tons of food production

134,400

Targeted impact – Ha of area cultivated

38,400