Agriculture remains the base of the Nigerian economy, providing the main source of livelihood for most Nigerians. Despite the enormous advantages amassed in agriculture, the sector continues to face many challenges including very low irrigation development and limited adoption of research findings and technologies. At the same time, farmers struggle with the high cost of inputs and low access to agricultural-friendly credit. Inefficient fertilizer procurement and distribution, inadequate storage facilities and poor access to markets pose additional obstacles.
LoftyInc Allied Partners is an innovation development company based in Nigeria that leverages technology to solve social impact problems in sub-Saharan Africa. In late 2021, the USAID-funded West Africa Trade and Investment Hub (Trade Hub) awarded LoftyInc a co-investment grant of more than $1.4 million to launch Project Sparrow. By providing incremental direct financing to more than 20 companies, most of them led by youth and women, Project Sparrow is designed to reduce the risk of local and global investment in the companies. The blended-finance approach stimulates investments and concessionary loans, thus accelerating the companies in achieving high productivity, better returns, and inclusive growth.
Under the project, LoftyInc carefully selected a portfolio of innovative small and medium enterprises in agriculture and agriculture technology, then helped prepare them for investments. Through training on extension services, technical support, digitalization, and organization of farmers into cooperatives, Project Sparrow is delivering an investment-readiness program to a carefully selected pipeline of entities in the agricultural sector.
The impact of the grant received from USAID has enabled Project Sparrow to train 54 start-ups in the Investment Readiness Program including training on digitizing agriculture, business and financial modeling, markets, supply chains, and growth tracks. Of those, 24 start-ups were selected and showcased to potential investors. In addition, five SMEs secured nearly $130,000 in credit from a Nigerian commercial bank, First City Monument Bank. The partnership has created 445 jobs through the portfolio companies engaged in Project Sparrow.
“Project Sparrow will continue to support micro, small, and medium enterprises through incubation, acceleration, and impact investing,” said AbdulAzeez Ajibola, Project Manager for Project Sparrow. “We at LoftyInc are working tirelessly to move from the third spot to the number one spot in the Investing in Africa ranking while fostering linkages across Africa.”