What Led to the Failure Of Agrotech, Agro Crowdfunding Firms
Experts in the agricultural value chain have unanimously agreed that agrotech companies in the country make unrealistic promises to their investors. Hence, they fail to remit their Return On Investments (ROIs).
In separate interviews with BizWatch Nigeria, the experts expressed opinions that while insecurity is a major challenge threatening agric-related businesses, most agrotech companies ignore critical factors like that and only promise their investors jaw-dropping ROIs to secure funding from them.
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Sharing his sentiment on the matter, Ojebola Matthew, the Chief Executive Officer (CEO) of Cibo Prima Farms, said “a lot of these agrotech businesses make promises that are unrealistic because they don’t consider the other factors that determine the success of their activities.”
Exemplifying his point, Matthew added that “for instance, you see some agrotech firms promising 200% ROI in one year, some promise 100% in three months, which in the real sense doesn’t make sense.”
According to him, the agrotech firms are taking advantage of the ignorance of the investing public, such that they make it look as if they have no risk to consider.
“Another problem we have in this country is that Nigerians are not interested in long term business. Most people you see subscribing to offerings made by these firms, are not people that have access to money.
“They just saw an opportunity they wanted to quickly take advantage of. They don’t care about the risks, and challenges; as long as they make their ROIs and capital, everything is good for them, even if the business fails,” he added.
Corroborating Matthew’s sentiment, a spokesperson of a leading agrotech company, who pleaded anonymity, revealed that it is not surprising that some firms in the agricultural value chain disappoint their investors.
According to her, they (agrotech firms) promise what they can’t pay.
Referring to the firms, the spokesperson said “they overshot their ROIs, which comes back to haunt them. Even though some managed to pay their promised ROIs to investors, you would see them eventually putting their operations on hold because the business would no longer be sustainable.”
“As profitable as agric businesses may be, there are unfortunate realities that exist in the agricultural ecosystem, which makes it very volatile, and because of that there’s a chance that you can cultivate on a hundred hectares and you get to harvest only about 20.25%.
“You can experience pest attacks, natural disasters, amongst other unforeseen challenges,” she added.