Two days ago, Propcom+ participated in a learning session convened by the Foreign Commonwealth and Development Office (FCDO) in collaboration with the Portfolio Monitoring, Evaluation and Learning Programme (PMEL) to reflect on insights from over a decade of Babban Gona’s catalytic finance experience and explore how these lessons can strengthen catalytic investment approaches.
The session convened a select group of development sector stakeholders and was chaired by FCDO’s Food and Agriculture Advisor, Archie Stay. Discussions were guided by Julian Peach and Iffat Mahmud, both of whom played key roles during the implementation phase. Among the participants contributing to the learning exchange was Propcom+ Country Representative, Adiya Ode.
The session focused on how donor-funded interventions can better unlock private capital and support high-impact enterprises to scale sustainably. In this case, early investment by FCDO (then DFID) through Propcom+’s predecessor programme, Propcom-Maikarfi, enabled Babban Gona’s growth in 2014, building its capacity to reach 2,000 farmers from an initial 103 reached in 2012 when Babban Gona started operations.
Across low- and middle-income countries, thousands of high-impact enterprises struggle to scale, not because their models don’t work, but because they cannot access the right type of finance at the right time.
As highlighted in the discussion, ventures often fall into the “missing middle”: They are often too large for grant funding, too risky for commercial banks, and too early for development finance institutions. This financing gap is particularly acute in agriculture, where smallholder farmers remain significantly underserved, despite threats to food systems and livelihoods for millions.
Against this backdrop, Babban Gona stands out as a compelling example of what catalytic finance can achieve when deployed effectively. Starting with limited access to institutional capital, Babban Gona has grown into a profitable agribusiness with strong repayment rates and a large-scale operational footprint. Its model, built on farmer groups, training, access to inputs, and a robust credit system has enabled it to support hundreds of thousands of smallholder farmers while significantly increasing their incomes.
A critical factor in this success was early support from FCDO through Propcom-Maikarfi. This included concessional capital through the Raise Out of Poverty (ROPO) bond, alongside technical assistance and monitoring systems. Together, these interventions helped de-risk the business, built a track record of performance, and ultimately crowded-in commercial and institutional investments.
At the heart of the discussion was the question of how this model can be replicated across programmes and donor-funded projects for greater scale and sustainability. The session brought out several important insights for future programming. First, catalytic capital works—but timing is critical. Small, risk-tolerant investments at early stages can unlock much larger pools of private finance over time. Second, the “missing middle” is not self-correcting; it requires deliberate, well-designed interventions that combine finance with technical support. Third, many development programmes still rely on traditional approaches that are not well suited to supporting investable businesses, highlighting the need for more flexible, investment-oriented models. Finally, participants reflected on the cost of slow learning: although Babban Gona’s success was evident years earlier, delayed communication of lessons has limited replication and slowed progress.
Building on these insights, several priority actions emerged. A key recommendation is to formalise aid-to-investment pipelines, enabling programmes to systematically identify, nurture, and transition high-potential enterprises into commercially viable investments.
Relatedly, there is a need to strengthen investment thinking within programme teams, equipping them to better assess risk, structure support, and engage with investors. Consistent and timely communication of results is also essential to build institutional confidence, enable faster learning cycles, and support the scaling of effective models.
For Propcom+, these reflections underscore the importance of scaling market-led solutions that unlock private investment, deepening partnerships with investors and financial institutions, and enhancing evidence and learning systems to support scale. They also point to a broader opportunity to deepen our role as a catalyst for market-shaping investments in Nigeria’s agricultural sector.
Looking ahead, the team will take forward learnings from the reflections, including actions to embed these lessons into programme design and strengthen engagement with partners.
Ultimately, the Babban Gona experience demonstrates that catalytic finance is not only viable but replicable. With the right combination of early-stage support, flexible capital, and timely learning, development programmes can unlock private investment, scale local enterprises, and deliver lasting impact at scale.
