Babban Gona

Babban Gona (BG) which means “great farm” is an innovative agricultural franchise established by Doreo Partners in Kaduna state, Nigeria. Babban Gona’s business model responds to some of the key challenges which constrain smallholder farmers from farming profitably. Some of these challenges include access to credit; to extension services; to quality, quantity and timely agricultural inputs; to technology services; to storage facilities; and to markets. Babban Gona aims to raise the incomes of 1 million smallholder farmers by 2025 using a franchise model which de-risks farmers and provides them with services around capacity building, financing, and input and output aggregation, all while making a modest profit. The franchise’s main crops are maize, soybean, rice and cowpea.

In June 2013, Propcom Mai-karfi (PM) invested NGN72 million (£288,000) in development impact bonds with Babban Gona called Raise out of Poverty (ROPO) bonds. Following PM’s investment, other investors followed including Bill and Melinda Gates Foundation, Kiva, and First City Monument Bank (FCMB). The target of the investment was to help BG scale-up its activities, finance business expansion amongst smallholder farmers, increase women’s participation by 25%, and to demonstrate to investors and potential start-ups that agriculture in Nigeria can be profitable. PM made an additional investment of NGN40 million (£160,000) in the franchise in February 2014 for a two year period, and reinvested the total capital and accrued interest from the first ROPO bond into a third bond in June 2015 for a further 18 months.

Maize was the first startup crop for Babban Gona, and farmers networked under the franchise are harvesting an average of 3.5 metric tonnes per hectare of maize, 2.3 times more than the national average. They are also more than doubling their profits, and are incentivised to expand their farm sizes with ready access to ample farm inputs and technologies, and a premium market for their harvests. Babban Gona has expanded from 16 trust groups (TGs) (which comprise 3-10 smallholder farmers) 100 farmers, and 106ha at inception in 2012 to 450 TGs, 1,800 farmers, and 1,500ha in 2014. Over the next two years BG plans to expand to 600 trust groups of 4,000 farmers cultivating a total of 3,000ha. In 2015 BG is working with 2,885 farmers in 718 TGs, cultivating 2,497ha of land. It has also invested in achieving its 20% percent women’s membership target.