Connexus is working with USAID and Winrock International to implement the Feed the Future Nigeria AEAS Activity, leveraging the power of Nigerian entrepreneurship to facilitate learning, replication, and scale around alternative models of extension to increase access and adoption of agricultural technologies for at least two million smallholder farmers (SHFs) in Benue, Cross River, Delta, Ebonyi, Kaduna, Kebbi, and Niger states. Using “Lean Farm” principles and tools to develop a deep understanding of existing production systems to identify the most impactful practices (MIPs) to improve efficiency and increase return on investment for farmers, AEAS leverages micro, small, and medium enterprises (MSMEs) as change agents around on-farm opportunities in the cowpea, maize, soybean, rice, and aquaculture value chains. Connexus facilitates private sector engagement and works with MSMEs (including farmers) to connect them with financial institutions (FIs) and design, pilot, and scale suitable financial products, including bundled financing packages for SHFs, especially women and youth.
In Year 1, Connexus interviewed 10 FIs and 25 private sector firms and integrated the findings into the Mapping to Markets and Lean Analysis. Connexus also designed and delivered a training of trainers (ToT) on Creative Approaches to Smallholder Finance to more than 40 representatives from partner institutions and is now working with them to design and implement action plans. In Year 2, Connexus trained 12 partner FIs on Agricultural Finance Product Design, Adaptation, and Delivery mechanisms and worked with them to develop financial products that will support MIPs and upgrading in the target value chains, which are now being pilot tested. We conducted 13 focus groups with community-based informal FIs to extract and document additional models to support underserved SHFs. We also trained 199 participants on business development services to improve financial literacy and management. In FY22, the activity helped increase productive yields by 387% for aquaculture, 116% for cowpea, 59% for maize, 26% for rice, and 66% for soybean.
In Year 3, Connexus conducted two ToTs, one for FIs on proven community-based financial services practices and credit enhancement tools to strengthen agricultural finance for smallholder farmers, including highlighting how banks can consider financing community-based financial service providers (CBFSPs) that can on-lend to smallholder farmers. The second ToT was for CBFSPs on governance, financial analysis, and credit request documentation and focused on what changes CBFSPs might need to make to improve their institutions’ access to finance from a formal FI. 38 individuals from 12 FIs registered for the ToT on strengthening agricultural finance, and 94 CBFSP representatives registered for the governance and agricultural value chain finance ToT, which had an average daily attendance of 50 individuals.
In terms of private sector engagement, Connexus has forged innovative partnerships, including:
- MasterCard Foundation/FCMB Aggregator Finance. Anchor-based financing model, where anchor is off-taker, and farmers, mainly youth and women, provide 5%-20% cash collateral to access seasonal input credit. Already the sum of N168M has been leveraged through a partner MSME (FadTeish) serving as aggregator/Anchor for 350 SHF in Benue. The Activity is working with FCMB to introduce the model to more farmers across the seven target states through key partner MSMEs. Our partner Crop2Cash is taking the model to Kebbi and Niger State. We are reaching out to aggregators in Kaduna and Cross River.
- OCP Farm & Fortune Hub /Agribooster Scheme. One-stop shop/agro-service center model with training/demo facility, input and machinery depot, agency banking, etc. managed by a franchisee or lead farmer. Clustered farmers in the hub enjoy input credit under Agribooster Scheme. Plans for extension agent certification and identification and pre-qualification of franchisees or partner MSMEs are now being pursued.
- Farmers Savings and Loans Group Model. Self-starter model – MSME cohorts, micro-enterprises, and farmers’ groups – build savings from internal resources to fund seasonal input credit among members. Prelude to external, third-party financing.
- AgroMall TelAgri Digital Finance Solution. Digital savings and credit solution based on established business relationships between agro-dealers, SHFs, extension agents/produce aggregators, and industrial off-takers based on a mobile wallet account. Credit provided by AgroMall is disbursed through the agro-dealers, while aggregators recover credit in-kind at the farm gate. Connexus provided support to AgroMall to improve its last mile private sector extension networks by conducting a field assessment of current operations and making recommendations on improvements to prepare the model to be scaled up to more than 20,000 farmers in the next year.
To date, the Activity has forged relationships with 282 MSMEs committed to commercializing and integrating the MIPs into their service delivery models. Applying a gender and social inclusion lens, Connexus is linking partner FIs to SHFs with an emphasis on women and youth, with an estimated pipeline of more than $100M. As of the end of Q1 Y4, we leveraged $25.4M in private investment and $14.6M in ag-related finance. To date, the Activity has benefited 46,696 Nigerians, including 32% women and 24% youth, who have increased access to productive resources. This includes 465 new jobs created, especially for women and youth. Over the life of the Activity, Connexus will help facilitate $60M in agriculture-related financing linked with improved agricultural extension and advisory services.