AfricanFarmer Mogaji is the chief executive officer of FarmCredit.Ng. In this interview with Josephine Okojie, he spoke about how FarmCredit is providing finance for smallholder farmers and investment opportunities in agric sector.
Can you tell us what Farmcredit.Ng is all about and what birthed the initiative?
FarmCredit.NG was birthed from a challenge. We did some analysis on the agribusiness sector about 20 years ago and realise that many people/practitioners who have Small and Medium Enterprise (SMEs) find it difficult to access credit, and when they need it; the industry has a different package for them. For instance, a farmer needs 10 bags of fertilizer but there’s nowhere in the country where you get just fertilizers as loan. The farmer might request for N400, 000, when he needs N100,000 worth of fertilizers to complete the cycle and so the farmer takes more than is needed and eventually spend the remaining on other things. In other sectors of the economy, you will find people who take vacation loan, salary advance, school fees loan, car loans, none of this exists in the agric sector so when we identified this challenge with farmers and processors we decided to create a solution that we call intelligent finance; where they can access what they want specifically and utilize it and we will now share the rewards.
There are numerous agribusinesses currently rendering similar services that Farmcredit provides, so, what are you doing differently?
There’s a general notion that we have numerous agribusinesses that have similar services, and it looks like there’s more than enough. When you do research, you find most of the platforms are not providing the exact services we are offering. Many of them are not touching the lives of even 500,000 farmers out of the 14 million smallholder farmers we have in the country, so if all the platforms are just doing 500,000 it means there’s still room to accommodate more, however, what we’re doing differently is; While targeting, the average person that comes on our platform has to have an O’level certificate. It’s easier to engage them in production than to engage urban youths who don’t know anything about production or rural life. We must train them and the capital we give comes in the form of inputs. We give the best quality inputs which you do not find most interventions and platforms. This will help them increase their productivity, efficiency, and effectiveness which eventually translate to having higher profits, we then take the output as payment, so you can call it another repackaged Anchor Borrowers Scheme which is a brilliant intervention by CBN that the private sector also needs to embrace, that’s one of the things unique about what we do.
How is Farmcredit supporting farmers with finance and how many have benefitted from the support so far?
Well, as a company policy we’ve decided not to throw around numbers because it seems to be the in-thing where everybody is talking about some huge numbers to make it look appealing to the audience as against impact, so we focus on impact from credit. We started this initiative about 6 to 7 years back but effectively this model was finalized about 2 years ago where we came to some agreement after tweaking various models presented by us and fine-tuned by the farmers. We have had to support farmers in Ogun, Oyo, and Ekiti states. We have also explored the north-east region – Niger, Gombe, and Kano. We have collaborated with a lot of organisations who have projects. So, we have several farmers in at least nine states, but the initial concept was to introduce it to southwest – where most of the youths are not looking into agriculture and that was the original intent but when we started, we realize that many farmers are interested, currently we have about 3,000 farmers reaching out to us.
Who is your target audience for your range of services?
We have four major target audiences with our services, we have improved sales where we sell premium top-notch quality inputs to farmers and we also provide consulting and advisory to new entrants, agric enthusiasts, financial institutions and the best is the government who are looking into agriculture now and they want to get it right with their policies and Investment. We also provide a lot of training, because it’s this training that shows how to get your hands dirty in the job and finally, we do monitoring and evaluation. In Nigeria’s agriculture you find an investor who probably is an executive director or an individual that has a 5 to 9-hour job, set up a farm maybe three to five hours away and doesn’t even know what’s happening. The staff may falsify report and this may affect productivity. This said entrepreneur can engage us to monitor their staff or their business operations and write an evaluation report which looks through the system like an audit and we advise either the business owner or the investor on the situation of the business now and how they can improve it and this happens from time to time so this is a very crucial service that we provide.
Inadequate access to finance has been a major challenge in Nigeria’s agriculture. How would the credit provided by Farmcredit help in addressing this issue?
We give farm input as credit; we don’t give cash. We give the best input that money can buy in the market, the ones that most multinationals use in the countries, our farmers use the same seeds irrespective of your background and so we teach you how to apply them to guarantee your bumper yield. We help the farmers maximize profit with our strategy. Many Farmers who need credit are frustrated because the financial institutions that they go to don’t understand the timeliness involved in productivity and profitability of the farmers while you cannot blame them for doing their due diligence before disbursement, so they either give credit late or they give too early.
What are your criteria for selecting farmers that benefit from your credit services?
Our work is core to bridging the gap between experienced farmers and the new entrants coming into the agribusiness value chain, therefore we work with farmers in clusters. We do not deal with a single farmer. You may apply as a single farmer but you will have to work and operate with farmers in clusters. Farmers must have up to 1 hectares and guarantors to access our credit. We partner and collaborate with the government. We work with youths and old farmers who need credit and who have a tractorable cleared land and are in clusters.
How easily accessible is Farmcredit to the indigenous farmers in the rural areas?
It’s very accessible because we are not just compiling names. We have operated on different farms for10 to 15 years.
What lessons have you learned in your journey of supporting both livestock and crop farmers with credit input thus far?
We have learned lots of lessons. There are lots of committed youth who are hungry for knowledge who want to learn and are also willing to serve and even though many of them are a bit discouraged they still have hope and are willing to try new things. A lot of urban youths are willing to go back to the rural communities and rural youths want to migrate to urban centers. The rural youth are loyal and they are committed to improving their productivity and there are lots of opportunities in the rural communities.
Does Farmcredit have any measures or provisions in place to help bridge the knowledge and information gap in the industry?
We are high on knowledge transfer capacity development, so we have 3 schemes; Triple 3 scheme is a 9 months training programme, we take fresh graduates and youths with a least O’level and we attach them to an SME in the agribusiness value chain for three months after three months. Afterward, we place them on a monitoring and evaluation program for a production cycle. We then support them in registering their business to have a legal entity and then monitor up to a year after the completion of our nine months program so that their businesses can be well established.
Are there any plans to leverage technology in helping farmers become profitable?
We are leveraging technology especially in climate-smart farming, irrigation is a core component of what we do is to address water wastage especially as regards agricultural climate-smart farming. We use technology for geo surveying, geo-mapping, testing the soils we do this with the help of drones.
How can investors get involved in Farmcredit, or what other opportunities are there available to leverage in the agribusiness sector?
Like I said earlier, collaboration is key in agribusiness sustainability so investors can come with their resources and do not have to primarily be money resources, it could be their expertise.
Where are the challenges in Nigeria’s agriculture and what support would be necessary for accelerating its potentials?
Nigeria has opportunities, what people see as a challenge is supposed to economically develop Nigerians. My favourite quote is from the book ‘Think and Grow Rich by Napoleon Hill’ which says ‘Out of every adversity comes a greater or equal opportunity provided we can find it.’
We can talk about the road infrastructure, electricity but they are all opportunities for all of us to embrace alternative power source. Solar can be leveraged everywhere in the country. We need the mindset of Indians and Chinese. They don’t come to Nigeria to talk about challenges, they fix it, make money and we carry certificates with many degrees to seek employment. Our paradigms must change now; opportunities are begging to be embraced.
What is your 2020 outlook for the agricultural sector?
The year 2020 is the promise year for anybody planning to look into agriculture, the recent policies have made it appealing, and anyone looking to leverage the agric sector might be profitable, however, a lot of caution also has to be taken because it has a lot to do with specialised knowledge and if you don’t have it, you may lose money.