The International Fund for Agricultural Development has reportedly granted a $5 million loan to a group of 377,000 rice and maize farmers in Nigeria.
It says the farmers, who are part of a cooperative society, Baban Gona, are the first set of beneficiaries of its Private Sector Financing Programme to end rising levels of hunger and poverty.
Babban Gona is a high impact organisation that uses technology to address youth restiveness in Northern Nigeria.
Reports say the Private Sector Financing Programme (PSFP) aims to spearhead an increase in much-needed private investment in small and medium-sized enterprises (SMEs), farmers’ organizations and financial intermediaries servicing small-scale farmers, which are too often neglected by investors. It will provide loans, risk management instruments (such as guarantees), and equity investments.
The President of IFAD, Gilbert F. Houngbo has this to say “We can end poverty and hunger! But to achieve this, we urgently need to stimulate more private sector investments to rural areas and unlock the immense entrepreneurial potential of millions of rural SMEs and small producers. “With access to capital, they can attract more investors and partners, grow their businesses and create employment opportunities – especially for young people and women.”
As part of its launch, the PFSP announced its first loan of US$5 million to a Nigerian social impact enterprise, Babban Gona, which has a strong background in successfully moving small-scale farmers from subsistence to a more market-orientated model.
The loan will help Babban Gona support 377,000 small-scale rice and maize producers in Nigeria with a comprehensive package of training, quality inputs, and marketing services.
Babban Gona will also store and sell the harvest on behalf of its farmers when prices are higher.
They aim to create up to 65,000 jobs for women and 66,500 jobs for youth by 2025.
By committing these funds, the PSFP aims to stimulate larger contributions from other investors and help Babban Gona meet its target to raise $150 million to reach millions of small producers.