In Nigeria, the agriculture sector employs about 70% of the country’s labor force and accounts for more than 30% of its GDP. Yet Nigerian farmers suffer from a very high poverty rate. Underlying this problem is a lack of access to resources—including quality inputs, credit, training, and market support—that farmers need to boost productivity.
Babban Gona uses a technology platform to build a scalable network in which farmers come together in small collectives, called Trust Groups. Through the platform, the organization provides clients with financing, high-quality seeds and fertilizers, training in best practices, and assistance in harvesting crops and bringing them to market. In combination, these services help farmers reduce risk and increase incomes.
Why We Invest
Babban Gona is demonstrating that smallholder agriculture can provide sustainable livelihoods in Nigeria. Much of its success derives from its creation of an online platform for delivering key services to farmers. Among those services are crop aggregation and coordination of the timing when farmers take crops to market. In this way, the Babban Gona platform enables farmers to optimize the prices that they receive for their crops.
Equally important, Babban Gona has adopted a social enterprise structure that allows for rapid scaling. The organization collects a portion of the profits that it helps farmers generate, and it invests that revenue both in adding farmers to its network and in improving the tools that it uses to support farmers. By design, this approach creates a flywheel effect: With each cycle of operation, Babban Gona widens the reach of its network and strengthens its financial base. Using this growth strategy, the organization expects to build a self-sustaining network that will encompass hundreds of thousands of farmers by 2025. In time, Babban Gona also plans to expand the network to other parts of Africa.
Since its founding in 2010, Babban Gona has built a network of farmers that now constitutes the largest maize-producing organization in West Africa. Today, its clients report net incomes that are twice as high as the national average in Nigeria. Internal and external impact evaluations show that being a Babban Gona client correlates with significant increases in yield and income. One study, for example, found that 97% of farmers who joined the Babban Gona network recorded higher yields than they had experienced previously. Meanwhile, the organization maintains a loan repayment rate of more than 99%.
How We Partner
King Philanthropies supports Babban Gona by investing in its most recent round of subordinated debt. With funding from King Philanthropies and other investors, the organization is expanding the size and reach of its network, incorporating new tools into its digital platform, and testing innovations in its business model.
Babban Gona is leveraging the King Philanthropies investment in a way that carries both near-term and long-term benefits. In the near term, every dollar of subordinated debt helps Babban Gona to attract three dollars of senior debt. (Investors in subordinated debt accept a higher repayment risk than investors in senior debt.) In the long term, early-stage support will enable Babban Gona to reduce the real and perceived risks of supporting its clients. As a result, large institutional funders will shift away from requiring the existence of subordinated debt as a condition of investment in Babban Gona.
Members of Babban Gona thresh maize on a farm in the Nigerian state of Kaduna. Photo: Babban Gona
Participants in Babban Gona’s Women in Economic Development Initiative (WEDI) chat during a break from a WEDI training session in the Nigerian state of Kaduna.Photo: Babban Gona
Babban Gona members harvest maize on their farmin the Nigerian state of Kaduna. Photo: Babban Gona
In the Nigerian state of Kaduna, men weigh crops harvested from a Babban Gona farm and prepare the material for distribution. Photo: Babban Gona