LAGOS -- It looked like the end had arrived for Adewale Fatai’s chicken farm. Money was running out. Built to house 30,000 chickens, the farm was producing fewer than 2,000 chicks. His family had no funds to lend, and Nigeria’s banks weren’t interested.
Instead, he went online.
Two years later, Fatai now has 20,000 chickens. Flanked by thousands of chirping birds at his farm in Nigeria’s southwestern Ogun state, Fatai says his operation was saved by Farmcrowdy, one of a breed of new peer-to-peer lending companies aiming to match farmers with small investors.
Farmcrowdy uses videos and photographs to show off farms to prospective investors, willing to tie up a bit of cash until harvest time and collect a small return.
Its co-founder and CEO Onyeka Akumah says the company has so far helped 7,000 small-scale farmers receive a total of $6 million from 2,000 investors since it launched two years ago. He said 95 percent of investment comes from within Nigeria.
The typical investment starts from around 90,000 naira - $300 - too little to interest many banks but enough to help keep a small farm going until harvest.
Since taking office in 2015, President Muhammadu Buhari has said he aims to revitalize the agriculture sector in Africa’s most populous nation to reduce the OPEC member’s reliance on oil exports and cut down on costly food imports.
But local farmers face multiple challenges - from floods, to a lack of electricity to regulate irrigation, to fighting with semi-nomadic cattle herdsmen that has claimed hundreds of lives this year. Most of the tens of millions of farmers work on a subsistence basis and live on less than $2 a day.
Farmers complain that they lack the access to affordable loans needed to cover their costs until harvest time.
Farmcrowdy and another firm, Thrive Agric, allow investors to choose a farm on the internet and decide how much to invest. They advertise returns of around 12-20 percent for investments in soybeans, maize, tomatoes, poultry and cattle. Investors buy a funding stake and are kept updated on the progress of crops.
“One of the primary problems we were trying to solve was solving the problem of access to funds for farmers: giving them the right expertise for them to grow and also linking them to markets,” said the CEO of Thrive Agric, Uka Eje, at his office in Abuja.
He said some $2.7 million had been raised by 1,670 investors for nearly 10,000 farmers since the company’s launched in 2017. His company provides farmer clients with expertise as well as fundraising, he said.