To increase agricultural investment in Nigeria, an agri-tech start-up company is pooling funds from numerous city-based investors and providing support to farmers via a digital platform.
A digital platform, which is connecting farmers in rural areas with young professionals in cities, aims to increase food production in Nigeria, while also promoting youth participation in agriculture. Through the digital start-up, Farmcrowdy, smallholders are linked with investors who are willing to sponsor agricultural activities, which enables farmers to improve their production and expand their farming operations. The company’s mobile app sends a notification to potential investors when farms are open for sponsorship, and investors then select the smallholdings they are interested in supporting. At the end of the farm cycle, farmers, sponsors and Farmcrowdy share the profit from the harvest sales.
In Nigeria, convincing commercial banks to invest in small agribusinesses is challenging, with lenders usually shying away from farming because of the associated risks. Farmcrowdy aims to address this issue by pooling funds from numerous investors and spreading the risk among a large population of middle-class Nigerians, most of whom invest about ₦100,000 (€245) per farming cycle. Investors receive between 6 and 25% as returns on the funds they provide – usually within a year – in addition to the capital they invest, and are able to monitor their investments from their homes or offices through the text, picture and video updates they receive via the app.
“I have always wanted to invest in agriculture without getting my hands dirty and Farmcrowdy has given me the opportunity to do so,” says Julcit Bali, a sponsor based in Nigeria’s capital, Abuja. Another sponsor, Chigozie Egbunefu, based in Port Harcourt in the south of Nigeria says, “[Farmcrowdy] is unique because of the coordination of its activities and regular updates to sponsors. It took away the burden of supervision and monitoring and I would certainly recommend Farmcrowdy to others.”
Farmcrowdy provide information on the availability of farm produce – usually cassava, soya beans, and rice – through their website and app, which helps farmers to secure potential buyers. “What makes Farmcrowdy different from other platforms is that it turns a complex problem into a digital marketplace,” says Farmcrowdy CEO, Onyeka Akumah. The company is also connected with agri-based companies that use raw agricultural materials in their production processes, creating a ready market for farmers. In addition, Farmcrowdy uses the sponsorship funds to provide agricultural inputs and services, such as seeds, fertilisers and farm equipment to ensure good yields, as well as to pay for insurance cover for both the farmers and sponsors in the event of a poor harvest.
In less than 2 years, over 7,000 farmers have benefited from 13,683 sponsorships and the platform has amassed over 64,000 followers. “Before Farmcrowdy, I used to cultivate one or two plots, but now I have expanded to cultivate 15 to 16 plots, which is about 1 ha of land,” says Blessing Jacob, a 24-year-old cassava farmer from Akwa Ibom state. Through Farmcrowdy’s technical support and agricultural advice, which is provided by the company’s field agents, Jacob has also been able to boost her yields, “Farmcrowdy taught [members of her cooperative] how to plant stems in a bed and space them correctly, and the yield of cassava we get now are bigger and healthier,” she says. Victor Akpan, another young farmer says, “I have learnt so much about farming through Farmcrowdy and I am making much more money. With the money I have received, I can now pay to continue my education.”