In a nation where institutions are too weak to provide important social and economic amenities for citizens, the concept of maximizing or utilising masses of individuals to solve a large problem can be a massive game changer.
Many years of bad government policies in Nigeria have made agricultural financing a ‘rocket science’. Most farmers do not have the inputs to reach the full harvest potential of their land plots because it is very hard for small farmers to access loans from banks. Also because farming is cyclical in nature, many times the timeline for agricultural loan applications to banks does not match urgent farming needs, hence the value of crowdsourcing for with crowdsourcing, small investors can easily invest in samll farms, making funds easily accessible to small farmers. This exactly what FarmCrowdy, a Nigeriam crowdsourcing agritech startup is doing.
FarmCrowdy crowdsources funds from small investors which is used to meet the short-term funding needs of farmers (e.g. money required for agricultural inputs), and at the end of the investment period, the investors then earn interest on the sums provided. Using digital technolgy individulas invest, monitor their investment and receive their earnings online form anywhere.
This tech-based model for agricultural finance was championed by Farmcrowdy’s Co-founder and COO, Africanfarmer Afioluwa Mogaji, who partnered with Founder & CEO of the company Onyeka Akumah from Autogenius, an online insurance broker, Akindele Phillips (Co-Founder; CFO), Tope Omotolani (Co-Founder; VP, Operations), Ifeanyi Anazodo (Co-Founder; VP, Products; Data), and Jimoh Maiyegun (Co-Founder; CTO). Africanfarmer Mogaji brings on board over 19 years of livestock and crop production experience into the company, and a large network and connection of farmer’s cooperatives.
Farmcrowdy’s revenue model operates on a split system for sponshorships: principal plus 40 % for sponsors, 40 % for farmers, and 20 % for Farmcrowdy. For example, if an investor sponsored a maize farm for 6 months at ₦100,000 and at harvest the produce sold for ₦150,000, the sponsor would regain their investment plus 40 % of profits (₦100,000 + ₦20,000), the farmer ₦20,000 (40 %), and Farmcrowdy ₦10,000 (20 %).
Farmcrowdy’s app allows a sponsors (an investors) to “Farm Shop” screened agricultural opportunities by produce type, funding amount, contract duration, and expected returns on an investment. The profiles include details on what the sponsorship funds―farm inputs, technical advice, or logistical support―to achieve yields. Common crops are cassava, soya beans, and rice. Investors can also use Farmcrowdy’s platform to track the performance of their sponsorships.
Farmcrowdy screens small-scale farms throughout Nigeria and works with partners such as Syngenta and International Institute of Tropical Agriculture (IITA) to shape sponsorship packages to provide them expertise.
Transactions with FarmCrowdy is entire digital, the entire process can be conducted remotely, without talking to anyone on the phone. When a sponsor or investor visits their website, he or she is given the option of registering with my email address or logging in via Facebook, which after filling all the information on the website pays the investment money via WebPay.
A sponsor receives updates on the farms with pictures every fortnight, and is given the option of visiting the farms in person to verify progress. After the investment period, the sponsor receives his or her principal and profit as a credit to his or her bank account which was previously supplied while signing up, and the payment to a sponsors account is automated via the SimplePay platform.
Farmcrowdy is a very sustainable Impact Enterprise that’s give a notably higher interest on investment than government treasury bills or bonds. It is currently the best investment for salary earners with idle funds. and young people.
If all that money lost in MMM Ponzi scheme were channelled through a crowdsourcing platform like Farmcrowdy, it would have been a win-win for everyone: for the investors, the farmers, Farmcrowdy and all the players in the value chain.
Investors can sleep with their eyes close after investing in FarmCrowdy as the company also acts as a broker and provides insurance for any capital invested on their platform through a credible insurance company – Leadway Assurance, as such an investor’s principal is assured.
There is a need for more crowd-sourcing platforms for agricultural financing, as crowdsourcing for agricultural funding, especially the model used by FarmCrowdy has the potential to unlock growth in the Agricultural sector in Nigeria.