The Chief Executive Officer of Babban Gona Services, an agro-financing firm, Mrs. Lola Marsha, highlights the importance of adopting skills in artificial intelligence and other emerging technologies in driving agro businesses. Emma Okonji presents the excerpts:
What informed your decision to go into the financing of small agric business?
Our decision was in recognition of the importance that smallholder farmers play in the agricultural sector, not just in Nigeria but globally. The percentage of smallholder farmers is about 80 per cent, making them the backbone of the sector. We discovered that if we could, through a multi-pronged approach, help them solve their underlying problem of low economies of scale and simultaneously increase productivity, we would be succeeding in increasing incomes for these farmers and giving a much-needed boost to the economy at the same time. We also saw an avenue to engage the youth by providing gainful employment, and reduce their chances of being lured into joining insurgent groups.
How will you leverage technology to provide the most needed services, given that the technology is emerging and cuts across all sectors of the economy?
We see technology innovations in agriculture not just limited to farming practices, but that which cuts across the entire value chain from production to processing/manufacturing, distribution and storage, and until the final product reaches the consumer. At Babban Gona, our use of technology is evident in the adoption of Artificial Intelligence(AI) to analyse farm growth, nutrients, and deficiencies in crops, GPS for tracking purposes and a host of other apps that enhance our productivity and enable us to deliver maximum value to our farmer members. We believe that our vision of making one million farmers have more money by 2025 can be achieved by leveraging technological innovation-hence, it is our goal to become more tech-driven in all our operations to meet our goals more efficiently.
What is Babban Gona all about and how do you intend to use the platform to better the lots of the intended beneficiaries?
Babban Gona is a social enterprise, and at the heart of all we do is impact. We began with a vision to end insecurity within our nation’s borders and to harness the potential within the agricultural sector towards becoming a food secure nation. From inception, our goal has been to drive impact on more and more member farmers’ year-on-year, using technology solution to drive such impact. We run an innovative model designed to serve the bottom of the pyramid, and offer the following services to our member farmers: training and development, financial credit, agricultural inputs, harvest, storage and marketing services. Through the platform, we have been able to improve the standard of living and income of our farmer members. Some of the benefits that our members’ gains are in the wide range of innovative products we offer. The products enable them to dramatically increase their net incomes by directly impacting all the key indices of their productivity such as their yield, input costs and commodity prices after harvest. The increase in net income has enabled members to make significant investments in improving their children’s education, health and nutrition, and invest in additional farmland and livelihood enhancing assets. A significant number of our members have enhanced access to livelihood assets such as home improvements like mud to brick houses, grinding machines and motorbikes.
The federal Government recently called for the establishment of Agro-allied industries in each state of the federation, to help produce enough products for all Nigerians. How will this initiative help to drive the vision of Babban Gona?
This initiative is laudable and a step in the right direction. Our agricultural sector is blessed and we need all hands on deck to ensure that we improve upon its present state and increase its output and productivity.
This ties with our vision because the growth of agro-allied industries would mean that there will be an increased demand for the end-products from our farmers, and translates to expanded incomes for them. If we leverage on significantly improving our production and manufacturing sectors, the benefits will be evident on both a granular level and on grand scale i.e with regard to the economy. For Babban Gona, our vision to make one million farmers have more money by 2025 requires collaborations and partnerships on all sides, and this development would significantly facilitate the achievement of this vision.
How will the border closure by the federal government motivate Nigerians to leverage technology in achieving massive food production for the country?
To quote the English Proverb that says “necessity is the mother of invention”, we see the border closure by the federal government as a challenge to every stakeholder in the sector. The fact remains that there is a lot of potentials yet untapped in the agriculture sector, especially with respect to leveraging technology to catapult our current productivity levels; this is our chance to rise to the challenge and channel our strength and strategies towards achieving and maintaining massive food production for the country.
Babban Gona has a northern connotation. Why the concentration on the northern part of the country when people from other geographical zones can also benefit from your service offerings?
Although our operations are currently centred in the northern part of the country, we understand that other geographical zones can benefit from our services and we are working towards scaling rapidly, but at the same time aiming for a sustainable system. With our unrelenting vision and strategic partnerships, we will be equipped to meet the needs of the entire region and even beyond.
Babban Gona’s focus on rural, smallholder farmers was in no small part informed by the unprecedented number of job seekers in the country. How will this initiative assist the government in addressing unemployment in the country?
Tackling the issue of unemployment is a major highlight for us. Through the adoption of innovative practices, and the use of technology we are changing the narratives around agriculture to attract youth and change their perceptions about the sector. We currently have 40 per cent of our member base as youth. Our training and development sessions run via our Farm University platform enables a paradigm shift from farming for subsistence to farming to make significant profit. Our model is designed to attract more youth, and recreate a sector that is open to all- women inclusive. For instance, we currently have a program targeted at improving the participation of women in the agricultural sector.
Access to the market has always been a major barrier for farmers to sell their farm produce. How will you deploy food processing technology and infrastructure to address the challenge?
Babban Gona as a company has identified a segment of the value chain such as production and we are focused on improving the profitability and productivity of our member farmers. In this regard, to solve the prevalent problem we identified eg where there is a glut in the market following harvest, and attendant low prices the farmers get as a result we have developed a system that allows us to connect our farmers with premium buyers. Through our in-season support also, there is an assurance that the output of our farmers will be of a higher level of quality than the average farmer, providing a niche in the market for their premium grains.
Before its exit from the Nigerian market, you managed the OLX platform, which brought buyers and sellers together for the supply and sale of used household items. What are your plans to bring the OLX experience onboard and how will such experience impact on your new line of business?
My motivation has always been the ability to make significant impact and add value regardless of the line of business. In line with the vision of Babban Gona, I hope to continue to apply my knowledge and experience to the organisation. Although not an industry I was familiar with, I see it as an opportunity to make immense social impact profitably and that for me is fulfilling.
The chemical composition of a soil determines the outcome of the produce. How will technology help you determine the best soil to cultivate, to enable you to pass such information to those you finance?
The suite of services we provide has been created in such as a way to give our members a head start to succeed. For instance, once we have completed the process of onboarding a new member, we carry out a process of field mapping which includes soil analysis. In-season, through our field agents, we monitor all fields closely and provide the appropriate balance of quality agricultural inputs to ensure quality produce at harvest.
Financing agricultural business is a tough one, considering the tough Nigerian economy. Do you have foreign financiers supporting your initiative?
Indeed, financing agricultural business can be a tough one, however, I have been lucky to have both local and foreign investors who believe in our vision and have consistently supported us along the way.
You are in business to empower people. What is the percentage of success rate in this kind of business?
Our model is quite unique. It has proven to be sustainable, and the success rate we have experienced since inception goes to show this with a 99 per cent repayment rate to date. From our modest start in 2012 with over 100 farmers, we have successfully scaled to reach over 19,000 smallholder farmers in the last season.
What is your business model in terms of recouping your investments, and how have you been able to use the available technology solutions to strengthen your business model?
We have in place an 8-level risk mitigation system that has ensured that our repayment rates have remained at 99 per cent. Our general efficiency as a business has to a large extent been improved by our use of technology, driven by our in-house Enterprise Development team who have developed a plethora of mobile-based applications, which make our operational activities more efficient as we scale. The use of technology has helped us to expand our reach and deliver seamless end-to-end services to the doorsteps of rural farming families, thereby strengthening our business model.
We have seen a lot of disruptions in the banking sector, occasioned by FinTechs players that have positively changed the way financial transactions are carried out. As a tech-savvy person, do you intend to replicate such technology disruption in the agricultural sector?
Well, from my responses so far I believe there is a hint to what I would love to see in the agricultural sector. I cannot overemphasise the importance of adopting technological innovations in the sector and although we have begun this at Babban Gona, we are yet to scratch the surface of all the possibilities that can arise from the fusion of tech and agricultural sector. However, we do hope to replicate this technological disruption in the agricultural sector in Nigeria. This will not only tackle the “unattractiveness” of the agricultural sector in comparison to other white collar-type jobs but increase the productivity of the sector as well.
What are the challenges in your line of business, and how do you intend to address them?
The challenges in our line of business centre around the largely unpredictable nature of rain-fed agriculture and other variables such as changing climate conditions, production risk, financial risks, changes in government policies, among others. Regardless, we proactively manage and maintain the efficiency within our systems, changing and adapting where we need to and constantly being innovative in our bid to achieve excellence and meet our targets as an organisation.