In a tripartite collaboration between Wema Bank, Cellulant and the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Cellulant has attracted a N2 billion financing to aid primary actors across the trade chain of agricultural operations.
Ademola Adebise, the managing director of Wema Bank who spoke at Cellulant Inaugural Partner Summit in Lagos said the earmarked fund is up for instant draw down to commodity aggregators on the Cellulant network.
This is expected to increase accessibility of affordable funding to all participants and boost access to market which hitherto was challenging to actors in the agricultural value chain. Adebise said support for the scheme will as well come from intervention funding from a development partner and other DFI at concessionary rates.
“Financial literacy is key to address financing because a lot of people are not aware of intervention funds available to them. There is also the problem of limited capacity to understand finance of agricultural value chain by banks but fintech entry is beginning to boost confidence in agriculture. So banks need to improve their skills as well,” the MD said.
Consumption of food, the end product of most agricultural activities in Nigeria is worth about $100 million daily and between $36 billion to $50 billion yearly, opening up a stream of opportunity in under-explored areas of agricultural logistics, food processing and tailored payment systems.
Bolaji Akinboro, the co-chief executive officer of a blockchain technology aiming to become Africa’s foremost platform for reorganising the fragmented supply chain of existing agricultural operations, Cellulant, said agriculture is enough to create wealth for Nigeria.
“It is enough to connect everyone and expose that connection to investors, banks, transporters and business developers,” Akinboro said speaking at the Cellulant Inaugural Partner Summit in Lagos.
Cellulant in the past 15 years has consequently focused on building linkage infrastructure for a closely knit relationship between farmers, aggregators, food processors and retailers.
Using an approach that ensures security of off-taking for farmer’s harvests and a guaranteed sourcing of raw commodity supply for processors, Cellulant eyes creation of about 1 million jobs in the next five years.
From 100, 000 metric tons (MT) that flowed through its platform for processing in the last one year, Akinboro said the target will be driven to 1 million MT by 2020 and 10 million in the next five years, 2024.
“It means there will be a large network of connection with an end to end visibility of the chain such that in five years time we will be like 200 times the current size,” he said.
On its supply network, cellulant works with processors including Olam, Dangote and Flour Mills of Nigeria, all of whom commodity stock supply is critical to. The digital platform also has partnership with banks, primarily Wema Bank, to prevent the operations of farmers, aggregators and transporters from being starved of financing.
It runs Agrikore and Tingg. Agrikore serves as a digital unit that connects stakeholders and services providers to farmers and the unbanked. The platform currently encompasses about 15,000,000 farmers’ records. Tingg on the other hand is a payment solution that enables stakeholders to make and receive payments, enhancing connection with merchants.
However for Rufus Udechukwu, Cellulant’s country business officer, Food Processing Marketplace, Nigeria can deal with food processing by leveraging private and public partnership, simplifying food regulatory environment, developing food safety and quality policy and continuous consumer education as other advanced countries have done.
His idea is that the marketplace is meant to solve the problems facing the
farmers and food processor while creating investment opportunities for entrepreneurs, insurers, logistics companies, and other businesses that provide aid to food production, processing and distribution.
