Babban Gona Farmer Services Nigeria

Kola Masha is the co-founder of Babban Gona and has held the position of Managing Director since the inception of the Company. Kola is an award-winning social entrepreneur dedicated to solving Africa's leading social challenge, dramatic rise in insecurity. Kola brings significant leadership experience spanning four continents and multiple leading companies, including General Electric (GE), Abiomed and Notore. In addition, Kola brings extensive public sector experience as the former Senior Advisor to the Nigerian Minister of Agriculture. Kola is globally recognized as a thought leader in African Agribusiness. In recognition of his leadership in driving positive change on the African Continent, he has received several global awards including the prestigious Eisenhower Fellowship and Rainer Fellowship. Kola holds an MBA (Honors) from Harvard University and a Masters in Mechanical Engineering from Massachusetts Institute of Technology, MIT.

In Nigeria, Africa's most populous nation, smallholder farming is a perilous occupation. Although agriculture represents a quarter of the economy, the sector is unready to meet the food needs of a population expected to double over the next generation. To help prevent the spread of economic insecurity in Nigeria, a revitalized agricultural sector that offers its youth attractive prospects for a viable income is urgently needed. Babban Gona is a social enterprise part-owned by the small networks of smallholder farmers it serves through a model created specifically to attract youth. The members receive training, credit, agricultural inputs, and, marketing support, that helps to increase their productivity and profitability, on average, to 2 and 2.5 times the national average respectively, and in so doing, enables Babban Gona farmers to move out of the poverty line and continue working towards improved living standards for themselves and their families. 

Babban Gona was established to end the rise in insecurity in Nigeria by making rural youth more money. Over the last decade, there has been a dramatic rise in the level of insurgencies in Nigeria, including Boko Haram often referred to as the world’s deadliest insurgency, that is believed to have claimed at least 100,000 lives, displaced more than 2.6 million people, caused pain to over 52,311 orphans and 54,911 widows, and led to about $9 billion worth of damage(1). A key driver of this rise in insurgency has been the spiraling growth in youth unemployment across the country. There is therefore an urgent need to create millions of jobs for youth in Nigeria, with 80 million youths entering an already over-saturated workforce in the next 20 years. This is a rate equivalent to 4 times the number of youths that entered the workforce in the last 20 years.

Our solution has the potential to impact millions of lives worldwide where high unemployment causes insecurity and insurgency. By creating secure livelihoods, we promote safe environments where people can live and prosper.

(1)Aljazeera Centre for Studies Publication: http://studies.aljazeera.net/e...

Through our Babban Gona Direct Model, we provide training, financial credit, agricultural inputs, harvesting and marketing services directly to our member farmers to help them increase their productivity and profitability, on average 2 and 2.5 times the national average respectively. This Model relies on our ability to train, develop and finance grassroot level leaders to run mini farmer groups called “Trust Groups”, comprised of 3 to 5 smallholder members.

Our Trust Group Entrepreneur (TGE) model, relies on us replicating our successful Babban Gona Direct Model one level up, by training, developing, and financing grassroot level youth entrepreneurs to run their own “mini Babban Gona” enterprise that manages a network of Trust Groups and Smallholder farmers. This solution leverages technology to unlock the power of youth entrepreneurship, by providing these entrepreneurs with a suite of mobile applications that helps them to successfully run their enterprises.

Through our business model, we are working to create an ecosystem that will in-turn provide employment for approximately 7.5 million individuals including youth and women by 2030.

We recognize that agriculture remains Nigeria’s job creation engine due to its size (23% of GDP)(2), growth potential, high labor requirement and relatively low skill required.  Our solution is therefore targeted at reaching Nigeria’s young population, with particular focus on the rural Northern Nigerian region, characterized by a large youth population with extremely low literacy levels. 

To unlock the potential of this job creation engine, we realized that, the critical challenge of low economies of scale, that inhibits smallholder farmers from attaining high levels of profitability, must be effectively and efficiently addressed. These low economies of scale include; 

1. High cost of production due to long and inefficient supply chains,
2. Low yields due to limited purchasing power leading to inability to purchase the quantity and quality of inputs to get high-yields, coupled with limited knowledge on best practices, and
3. Low harvest price for commodities produced.

At Babban Gona, we are therefore focused on providing these services, to de-risk rural youth and enable them access to critical investment capital to run successful farming businesses and graduate them as well as their families to additional successful rural businesses. 

(2)Nigeria Bureau of Statistics, GDP Report Q4, 2018. Agriculture: Q1 2017 – Q4 2018

The frequent exploitation of the poor at the Bottom-of-the-Pyramid has caused a lot of smallholders to have very low levels of trust.  Babban Gona has however been successful in gradually building this trust in our communities over the past eight years of operation with a significant level of investment, time and resources. The Babban Gona Model has over the years been able to provide quality income-earning opportunities to improve livelihoods, increase earnings, generate high levels of private investment, empower women and youth, and introduce innovations to modernize agriculture.

In 2007, due to my mother’s failing health, I moved back to Nigeria. It was there working at Notore, located in the heart of the Niger Delta, that I witnessed first-hand how insecurity manifests. I came to the realization that as oxygen is to fire, so are unemployed youth to insecurity. In Nigeria alone, a wave of 20 million youth entering an over-saturated labor force in the last twenty years caused youth unemployment to skyrocket, triggering not one, not two, but three insurgencies.

To do my part in solving this challenge, in 2012 I moved to a small village in Northern Nigeria, an impoverished area impacted by insurgencies and brutal bombings, with an idea - To halt the spread of insecurity by unlocking the power of agriculture as a job creation engine. Due to its high need for labor and low skill requirements, farming had the potential to create jobs and draw millions of young people into the sector. This is where Babban Gona was launched, a business dedicated to empowering smallholders to transition from subsistence to highly productive and profitable commercial operations. 

The problem of unemployment is one that is extremely dire in Nigeria today. The dramatic rise in the level of insurgencies witnessed in Nigeria over the last decade can therefore be regarded as a direct consequence of the spiraling growth in youth unemployment across the country. Having seen the devastating impact of insecurity on families and livelihoods, my vision really is simple, that the next time an insurgent group like Boko Haram comes into a village to recruit youth to fight in their deadly and vicious insurgencies, youths will have enough income to provide quality livelihoods, healthcare and education for their families that they say “Thank you, but we are OK”. This urgent need to create millions of jobs for young people in Nigeria is the primary reason why Babban Gona was created. While agriculture is the job creation engine in Nigeria, Babban Gona is the fuel that is required to catalyze this growth. 

Now entering our 9th year, Babban Gona has demonstrated a proven track record of enabling financial sustainability at a relatively low scale, together with high impact and scalability. Since inception, Babban Gona has delivered affordable loans to approximately 100,000 smallholders (45% of which are youth) and reached over 210,000+ smallholders indirectly via our business line extensions. We have done this by partnering with public and private sector organizations, to develop and scale the model; this has unlocked tens of millions of dollars in investment to date. 

As an award-winning social entrepreneur dedicated to solving Africa's leading social challenge, dramatic rise in insecurity, I bring significant leadership experience spanning four continents and multiple leading companies, including General Electric (GE), Abiomed and Notore . In addition, I also have  extensive public sector experience as the former Senior Advisor to the Nigerian Minister of Agriculture. In recognition of my leadership in driving positive change on the African Continent I have received several global awards including the prestigious Eisenhower Fellowship, the Rainer Fellowship, and recently, Babban Gona became the first ‘for-profit’ social enterprise to win the Skoll Award for Social Entrepreneurship. I hold an MBA (Honors) from Harvard University and a Masters in Mechanical Engineering from the Massachusetts Institute of Technology, MIT.

When Babban Gona was launched, all our operational activities were carried out manually. This served us well for the first few years. However, as we began to scale our operations, I realized very quickly that this model was not sustainable to realize the ambitious growth targets that we had set for ourselves. This meant a painful decision to pause our growth strategy for a couple of years to implement sustainable systems, without which would have resulted in catastrophic consequences in the future. We realized that to optimize the resources, we had to produce results - especially given the rural areas we operate in - we had to transition from a manual based organisation to a fully digitized and technology driven organisation to achieve our desired level of scale. Those years of paused growth have now enabled us to completely re-define our business model to ensure a fully digitized operational capacity that has successfully leveraged technology to provide our services to our farmers, in-turn positioning us as the current largest producer of maize in Nigeria. To date, our team of software engineers have built in-house, a suite of over 30 mobile applications with one-click functionalities to support all our field activities.

A fundamental part of what we do at Babban Gona is in our ability to provide opportunities, but not only to smallholders. Our staff are an integral part of the organization and one of my goals is to position the company is such a way that it inspires even the lowest qualified staff or field officer to work hard, dream and believe that they can grow to one day take over the leadership of this Company.  Specifically, I would like to highlight one of our success stories in particular. I would like to introduce you to Elijah Ishaku, who joined the company over 6 years ago as a process control/audit analyst. Through a combination of my mentoring and Elijah’s hard work and dedication, he has grown rapidly through the company, working in different roles and departments. Today, Elijah is one of our longest serving staff who now heads the entire smallholder partnership portfolio across all our operations, where he manages a team of over 30 full time employees and over 700 field officers.

Since inception, we have grown over 100x from less than 200 farmers in 2012 to approximately 20,000 farmers in our 2019 season. Our solution is uniquely positioned as we are able to leverage our innovative service delivery model which ensures a full package service delivery to farmers, placing us as the ‘one-stop shop’ for smallholder farming in Nigeria. In addition, based on our interactions with and understanding of the grassroot level farmers, we build technology applications that are easy to use, even for those with low literacy levels, with zero-click or one-click functionalities.  We also ensure the applications are operable offline as a remedy for the low internet availability within the communities in which we operate.

We believe that to dramatically scale the impact of lifting smallholders out of poverty, empowering youths through our Trust Group Entrepreneur(TGE) model holds the key to actualizing this vision. In 2018, we launched the TGE model with a pilot of 97 young entrepreneurs. These 97 entrepreneurs were trained and equipped with a suite of mobile technology applications that resulted in them managing the recruitment and monitoring of approximately 5,000 farmers for the 2019 season. For our current 2020 season, we have recruited and trained approximately 1,500+ TGEs, that will in-turn support over 20,000+ farmers. Our model is therefore proven, showing that with the right level of investments, scaling this initiative will lead to a significant rise in the number of smallholders as well as  create millions of jobs for youth and women. 

In Nigeria today, smallholders make up approximately 80% of farmers in the country. These farmers produce a substantial percentage of the food consumed by Nigerians. However, Nigerian smallholders are faced with enormous challenges mostly in the form of low economies of scale which has inhibited their growth potential and made it almost impossible for them to scale and become profitable. This, in turn, has led to thousands of youths abandoning farming and joining insurgency groups as a means of survival. Lack of opportunity is further heightened for females whose progress is hampered by the patriarchal nature of the communities where farming is largely practiced in the country. With an estimated 80 million youths set to enter an already over-saturated workforce over the next 20 years, there is an urgent need to create millions of jobs in Nigeria. Agriculture remains Nigeria’s job creation engine due to its size (23% of GDP)(3), growth potential, high labor requirement and the relatively low skill required. However, to unlock the potential of this job creation engine, the critical challenge of low economies of scale that inhibit smallholders from attaining high levels of profitability, must be effectively and efficiently addressed. 

Babban Gona was established to solve the problem of spiraling youth unemployment by creating jobs to empower youth in agriculture. To achieve impact Babban Gona, franchises thousands of farmer cooperatives called “Trust Groups” which enable farmer members to dramatically increase their profitability and yield. Babban Gona provides the four key services required for farmers to be successful; 

1. Financial Services,
2. Agricultural Input Services,
3. Training and Development, and
4. Marketing Services. 

These services in turn have the following impact on farmers:

1. Increased Profitability,
2. Increased Productivity,
3. Improved Business Practices,
4. Decreased Labor Time, and
5. Livelihoods Creation. 

We became the first for-profit enterprise to be awarded the Skoll Award for Social Entrepreneurship and have been recognized by Forbes, London Stock Exchange and the Wall Street Journal as below:

Forbes: https://www.forbes.com/sites/l...

LSE: https://www.lseg.com/resources...

WSJ: https://www.wsj.com/articles/m...

(3) Nigeria Bureau of Statistics, GDP Report Q4, 2018. Agriculture: Q1 2017 – Q4 20188

Through both our Babban Gona Direct and Trust Group Entrepreneur models, we will serve the following across the next five years;

2020 (Current Season): 35,000 smallholder farmers
2021: Approximately 57,000 smallholder farmers
2024: Approximately 750,000 smallholder farmers

Over the next five years we will focus on three distinct areas;

• Leadership Development Initiative: This initiative will focus on improving access to human capital by increasing the skills of TGEs and Babban Gona team members, while simultaneously leveraging technology to simplify the activities of smallholders, TGEs and Babban Gona team members. To improve the skills of existing team members we will scale up classroom training programs for Babban Gona team members via the Babban Gona Leadership Institute, our training programs for smallholders via our Farm University, and training programs for TGEs by establishing the TGE University.   
• Entrepreneur Development Initiative: This initiative will focus on supporting the Trust Group Entrepreneurs, to set up successful enterprises and attracting, retaining, and growing the number of smallholder members their enterprise services. Key success factors include; reducing the amount of effort made by smallholders and TGEs in their interactions, positively impacting all three levers of net income i.e. cost of production, yield and price to enable smallholders to earn more, and by expanding the different product offerings to appeal to the largest population of smallholders. 
• Rural Microfinance Initiative: A robust financing structure needs to be in place for any intervention to successfully scale at the intended level. Therefore, this is an imperative and critical aspect of our proposed intervention. This initiative will focus on lowering Babban Gona’s, and ultimately the TGEs and members' cost of financing.  This will be achieved by raising more affordable public debt and increasing access to Nigerian government intervention funds.

Some key challenges we will face over the coming years include; 

• Accessing Skilled Human Capital: We are working to address this by developing in-house training institutes.  With the support of our partners, we have developed “Farm University” to train our extension of field offers and the “Babban Gona Leadership Institute” to upskill our employees on areas such as leadership and management;
• Process/Operations & Technology: We have identified that to achieve our desired level of scale, technology and process engineering must stand at the forefront of all our operations. This has resulted in the full digitization of all our manual processes over the last 2 years. A significant milestone that was achieved was in our transition from cash payments to 100% electronic payments to our farmers in 2018; and,
• Accessing Low Cost Financial Capital.

Babban Gona is constantly evolving to the changing needs of our business. As we continue to scale, we envision different challenges and learnings that we will need to think through and incorporate back into the business. Ultimately, technology solutions will stand at the forefront of skills that need to be improved upon or newly acquired.

• Human Capital: Overall, the management team has a combined 50 years of relevant experience across business management, operations, finance, and technology functions. In addition, 100% of the company’s operational team are based in the North, with over 80% originally from the region and able to fluently communicate in the local language. 
• Culture of Continuous Improvement: As an organization, our approach to research, learning and development is structured to achieve maximum result by leveraging our internal Babban Gona Leadership Institute (for staff), Farm University (for farmers) and external training programs for staff at all levels. 
• Technology/Processes/Operations: With a strong experienced team of over 20 software engineers and product development managers we will continue to innovate technology for business operations. We are also committed to ensuring continuous improvement and redefining of our business model. Over the past 8 years, we have built a proficient supply chain capacity and last-mile-logistics network that ensures we can source high quality farm inputs and subsequently distribute them to our network of farmers. 
• Accessing Low Cost Financial Capital: To address this challenge, we leverage on our partnership with financial institutions to access concessionary funding made available to the agricultural sector.

We have over the years worked on building strategic partnerships between key stakeholders that share our vision of creating thousands of employment opportunities in Nigeria. Some of our key partners include:

• Public sector partners: responsible for part-funding operational and debt budgets
• Private sector partners: responsible for part-funding and guaranteeing the debt budgets
• Local commercial banks: provide denominated debt to fund the debt budget, as well as direct third-party financing options for TGEs
• Education & Training Facilitators: develop our digital education and training systems
• Research Institutes: develop hybrid seeds and guidance on farming best practices, improving yields, and ultimately net incomes.

Babban Gona has been developing a direct service model (Babban Gona Direct), similar to a Walmart store, where we directly provide service via our own staff directly to our customer, the smallholder farmer. In the last year, Babban Gona has developed and piloted an enhanced model called the Trust Group Entrepreneur Model, where we empower independent young entrepreneurs, we refer to as Trust Group Entrepreneurs (TGEs), to run their own mini Babban Gona by providing them access to a series of services powered by technology. The TGE program is analogous to Amazon Marketplace, where Amazon leverages technology to provide independent third parties the opportunity to sell direct to customers, while Amazon collects service fees and a commission from the third-party sellers. The technology infrastructure we have and are developing seamlessly enables these TGEs to manage member recruitment, smallholder customer financing, inbound/outbound payments, input delivery and harvest aggregation, storage and marketing. Our service offering to TGEs is very similar to Amazon Marketplace, where Amazon provide storage, marketing, payments, customer financing and logistics support to third party sellers. Our success is evidenced by our track record of supporting over 100,000 smallholders to date and disbursing over 170,000 loans with an average repayment rate of 99%.

The Babban Gona business model was built to be sustainable from inception. As a business, we have had a relentless focus on creating efficiencies in our model, which led us to attain a positive EBITDA margin for the first time in FY 2015 and positive net income from FY 2016. On this journey, we have partnered with public/ private sector organizations, DFIs, and donors to develop and scale our model; this has unlocked tens of millions of dollars in debt capital, enabling us to scale faster to support tens of thousands of smallholders achieve yields of 2x the national average and net incomes of 2.5x – 3x the national average, whilst maintaining a 99% repayment rate under our credit program. 

Our long-term vision for sustainability will be premised on our ability to create lasting value for our members, while also ensuring our alignment with the United Nations sustainable development goals; specifically SDGs 1, 2, and 8. To ensure sustainability, we focus on addressing the key challenges faced by smallholders in a financially sustainable manner i.e. high cost to serve, due to high fragmentation and low geographic densities especially in rural, communities, and their low purchasing power.  With our model we deliver high-cost and low-margin products and services at high volumes.  First, we overcome the purchasing power challenge by providing financially sustainable low-cost-credit backed by our risk-mitigation system. Second, we overcome high costs to serve by shifting tasks to the smallholder and equipping them with technology empowered support for success. 

Our initiative is focused on securing the future for Nigeria’s youth by transforming agriculture into a job creation engine that can break the cycles of poverty and unemployment. Our goal is to successfully scale our impact to provide employment for 1 million individuals by 2025 and 7.5 million by 2030. Winning the Elevate Prize will enhance the resources and support available towards scaling our TGE model in these early stages of implementation.  It will enable Babban Gona to meet its medium-term goals of supporting 500,000+ individuals by 2022. 

We see the Elevate Prize being of tremendous value to us in 2 ways; (1) This award will help us significantly improve our efficiency with regards to the deployment of technology, processes and operations. We realize that, to effectively and efficiently manage the scale of our operations, we need to invest heavily in digitizing and automating all manual processes across the organization to ensure that the quality of services we provide to our smallholders does not in any way decline due to some of the complexities of scale. (2) We are hoping to significantly leverage on the Elevate platform and resources to create an increased level of awareness to the work that we do at Babban Gona. To achieve our target of reaching 7.5 million individuals by 2030, we require hundreds of millions of dollars in financing. We hope that winning the Elevate Prize will be the catalyst we need to position us for the right kind of partnerships that we require.

Financing Partners: To meet our target of smallholders we have projected to reach in subsequent seasons, we will like to partner with strong development financing institutions, and private organizations with a strong focus on social impact, and a desire to deepen their impact in the agriculture sector.