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Agriculture in today’s world has morphed beyond the traditional production of food for human consumption and animal feeds into a global financial stronghold and economic reserve. Understandably, to tackle the challenges of sustaining a growing world economy and overcome the problems of food production, climate change, modernised policies, and urbanisation trends, the agriculture sector has to be diversified and flexible enough to link more capital with agricultural projects, albeit digitally. This is where project Crowdfunding comes in; a concept typically used in other climes for soliciting interest-free or not necessarily repayable funds, has become synonymous with agriculture in Nigeria. Crowdfunding is the process of soliciting modest contributions from a large number of individuals via online platforms (crowdfunding platforms) in order to finance a project, cause, or business. In its simplest form, crowdfunding is a method of supporting a project or endeavour by soliciting financial contributions (often modest sums) from a large number of individuals (investors), primarily over the internet.

Today, we have several of these crowdfunding start-ups and the most notable ones include: Farm Crowdy , Menorah Farms, Thrive Agric, Farm Kart, Goatti Investments, E-Farms Nigeria, HO Corn, etc. But just when it seemed crowdfunding was beginning to receive interest and massive engagements from Nigerians, most of these crowdfunding start-ups began to default on payment and send out messages that they would not be able to execute the payments of their investors.  

A most fitting example was that of HO Corn. In early 2020 they embarked on a nationwide publicity to cultivate maize on about 30,000 hectares, which was to yield 120,000 metric tons. If the plan had actually succeeded, there may have been some comfort for both industrial and other users following Nigeria’s restriction of foreign exchange for maize importation. The scheme was to accommodate 30,000 investors with a minimum investment of N100,000 per lot and assurance of a 50 percent return on investment after six months. A few days to the due date in July, the company sent a mail to its investors requesting for three more months, until October 2020. It would later default, and yet again, less than 24 hours to another December 30 deadline, sent another message that it could not execute repayment.

Thrive Agric, one of the leading platforms, also got smeared in a financial controversy leading to public outrage and threat of legal actions from aggrieved investors who laid complaints about their inability to either withdraw their investments or get returns as promised by the platform.

Similarly, Goatti investments, a subsidiary of Remnikes Agricultural Produce and Services Limited, seemingly hoodwinked their investors. At the beginning of their first investment cycle, Goatti investments sent out monthly reports on how the investments were fairing and that seemed to put the minds of their investors at ease. Close to the maturity of the first investment cycle, an email was sent out from the company asking for a two-month extension and plans to set up a zoom meeting for investors at the end of January, but no email invites were sent out in January. At some point the communication lines became glitchy, and they refused to respond to messages. Goatti eventually cut every line of communication by disabling comments on its Instagram handle and refusing to take calls. The CEO and some staff also refused to acknowledge messages on their Social Media pages.


The problem that most of these crowdfunding companies attributed their failure to was the Covid-19 pandemic of 2020. In the heat of the pandemic, the government instituted a lockdown that came as a shock to farmers all across Nigeria. Movement restrictions were implemented by security operatives across the country and this meant that many farmers could not gain access to their fields. A sad fate, as most farmers who did not have adequate storage facilities, had to watch their produce spoil and rot or sell them at ridiculous prices to unscrupulous middlemen. Even after the lockdown was eased, there were numerous reports of farmers being harassed at police and military checkpoints. Where farmers refused to pay bribes, security personnel seized or destroyed their produce. This atmosphere of harassment and intimidation on the roads also apparently discouraged many food transporters from operating. The transporters willing to pay bribes passed their additional costs on to farmers. In addition to this loss of income, farmers had to deal with the increasing prices of agricultural products such as fertilizers, herbicides, seedlings, etc. because the lockdown also affected the import and transportation of such goods.

While this may have been a legitimate reason for the companies reneging on their initial promises, some lead their customers to believe that the capital invested by them was fully insured by Insurance companies, most notably, Leadway Insurance. Thrive Agric on their website stated:

“Is my money safe?

Take our word for it, your funds are safe, but more than just our word, all our farms are fully insured by LeadWay Assurance.

Therefore, in the event that something remotely goes wrong with our harvest, which has historically not been the case, your capital is insured, there is nothing to worry about.”

A statement their customers would later have to find out the hard way to be a lie.

Leadway Assurance not too long after issued their disclaimer which read:


Following recent enquiries we have received on the delay on the part of some of our agric. Tech partners to meet up with the obligations to their investors, we use this medium to clarify and put in proper perspective the terms of our contractual relationship with our agric. tech partners.

Our contractual obligation is limited to the agric. Tech platform and not to their individual investors. Leadway only provides insurance cover for the farm assets of its insured agric. platforms.

This, therefore, means that we only provide cover using our agric. based insurance solutions for the risks to the insured farms and other farm assets against perils stated in the insurance policy document issued.

As we have stated repeatedly, Leadway Assurance does not in any way guarantee the safety of investors’ funds if lost due to agri-business failure. Investors funds and the returns thereof are not covered as the subject of the insurance policy Leadway provides.”

Given all this, it shouldn’t come as a shock that the companies might have completely lost the trust of their investors, some of whom not only wanted a refund of their capital but also questioned their legitimacy with some investors labeling them Ponzi schemes. Under the guise of operating crowdfunding platforms for agriculture, the sector risked becoming the Trojan horse potential fraudsters and Ponzi scheme operators would use in finding ways to the pockets of unsuspecting members of the public.


There have been several criticisms as to why the Securities and Exchange Commission (SEC) had little to no regulations in place concerning these agro-tech crowdfunding companies.  In 2020, Mary Uduk, the acting director-general of the Securities and Exchange Commission (SEC) first disclosed that the commission was planning to introduce some forms of regulation for crowdfunding, but it wasn’t until January 21, 2021, that a document was released by the SEC on their website which had detailed regulations and guidelines for the conduct of crowdfunding business generally in Nigeria, not just agriculture.

Under the new regulation, crowdfunding can only be raised through an online portal that must be operated by crowd-funding intermediaries who must be registered by SEC and have a minimum paid-up capital of N100 million and a current Fidelity Insurance Bond valued at 20 percent of the paid-up capital, among other requirements.

The SEC provided a transitional period that elapsed on April 21, 2021, and 2 months later, precisely, by June 30, all existing investment crowdfunding portals/digital commodities investment platforms were to either comply with the registration requirements or cease operations.

This was to be the moment investors waited to see for a long time, when they could finally invest with ease and importantly, peace of mind. For the crowdfunding platforms, especially the prominent ones that had clamoured for regulation and pledged to support it whenever introduced so as to separate themselves from Ponzi-like operators, this was to be their moment too.

A shocker, however, as Within three months of the SEC regulations finally taking off, crowd-funding platforms started to ditch what was once their pathway to growth, the model was being abandoned, although none would admit it was to avoid the commencement of regulations.


It is indeed sad that the agro crowdfunding sector fell as quickly as it rose. The guidelines by the SEC, were among other things, to ensure the investing public was protected from operators whose activities may be suspicious, but with major players exiting the stage, and smaller players not likely to approach the stage, it remains unclear, why the introduction of what could have conferred legitimacy on these businesses, was instead seemingly scaring them away.


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1 year ago

I actually never thought of it like this… SEC steps in and the bulk of these initiatives step out…