In 2020, Ayoola Ogundele made a decision to invest N1 million in Farmsponsor, an agri-crowdfunding platform which claims it has a mandate to promote food security in Africa during its meeting with investors’ representatives as of 12th of December 2021. The business, which is owned by two brothers: Chike E. Akpa and Innocent N. Akpa (a.k.a Bill Kenneth) promised investors 250% ROI on long term (five years) and 15% ROI on short term cycles (3 months).
It was a long-term investment (5 years) with an expected return of N250% in five years – RoI to be paid every 6 months. He had seen reviews about the Platform on social media and was further convinced when he saw posts which confirm the company has automated equipment for poultry online. But Ayo was only paid 37% ROI for the first year; and until today, his initial capital plus the remaining ROI is still hanging.
Similar to the case of Ogundele, several investors who staked millions in the brother’s business have expressed dissatisfaction with the continuous failure to pay out investors and reach out to investors. @Jaboyka on social media said, “Farmsponsor totally cut communication with her investors. I don’t understand why you trick people into making investments and shut the door on them when they need information on status of their funds?”
In July 2021, the platform explained that it had its operations destabilized due to the sudden ban of crowdfunding operations by the Security and Exchange Commission.
The statement read in part, “The past few days have been quite a challenge as the company has been facing some difficulties which have destabilized our crowdfunding operations. These challenges stem from the recent SEC cease announcement on all crowdfunding platforms by June 30, 2021. This has made it impractical for Farm-sponsor to continue its crowding operation as the notice came upon us abruptly, in the first week of June.
“We are taking appropriate measures to see that all funds collected from every sponsor will be paid back accordingly. Please bear with us as payments will likely be staggered. We are working to make the payout as fast as possible but to be honest, it may take up to 18 – 24 months to finish. Paying everyone at once will eat too deep into our operational cash flow. Let us continue to work to pay you.”
Clearly, the Covid pandemic coupled with SEC policy ordering crowdfunding companies to register or stop operation by month end of June last year had generally affected businesses and farms especially, causing many businesses in that line to suffer dire consequences and subsequently affecting payout to investors.
However, while some platforms are seen to be actively strategizing on possible solutions to fix the mess as soon as practicable, it appears that others such as Farmsponsors have been playing on the intelligence of investors.
While it is easy to argue that the reason for not meeting payment promise could be tied to the inability to get loans as promised, it is important to note that the company has not been responsive to the appeal for an interim takeover by another management firm.
In addition, the company has also failed to respond to requests by investors for an independent forensic audit to trace all assets purchased with investors’ funds. As a result of this, many investors are of the opinion that the insincerity of the brothers could mean that the platform may have set out with the intention of a Ponzi scheme from the beginning.
As of press time today, investors say there is still no clear-cut direction on when exactly they will be paid. “I assume the loan story is either fake or he didn’t get it and decided to excommunicate investors in 2022 instead of liquidating his company,” an investor told Nairametrics.
“As it is, we are still expecting disbursement of the funds. Last week, I (CEO) was engaged in series of meetings regarding the disbursement of these funds and the assurance and reassurance was given that we will get this fund before the end of this year (2021)…” CEO said.
Every day, as the lines continue to resonate in the minds of over four thousand investors who have been failed many times by Farmsponsor, an important question that clouds the mind of many is, “Are the co-founders of Farmsponsor playing games with investors?”
Not only has the company failed to deliver on their promises, but its co-founders have also ceased communicating with members, putting a hold on zoom calls with investors and failing to respond to questions on how and when the scheme would help to end the pain suffered by investors.
As of the time of this report, Nairametrics gathered that after almost a year since it started defaulting in July 2021, the platform has continued to make empty promises and give investors false hope.
As of the 13th of February 2022, Akpa Innocent (Bill Kenneth) in a channel told Nairametrics that it is engaging sponsors to ensure that everyone gets paid.
“We have also continued to engage with sponsors both privately and in groups, on efforts we’re making to make sure we pay everyone. We can make bold to say that the wait is almost over, we’re still in operation and our productivity on the farm, the plant and the hatchery has continued to increase,” he said.
Speaking on why the company cut communications with investors, he said, “The last virtual meeting with investors failed to hold as a result of technical issues. We hope to resolve that as soon as possible to enable us to continue to interface with the investors through that medium. We also appeal to all sponsors to keep up the good support and to kindly exercise a little more patience as we swim through this murky water of our business growth.”
The Nigerian crowdfunding space appears to be changing direction, presenting a vague future for the business, due to failing operations. This has fueled a rising feeling of pessimism over the crowdfunding industry in the country.
From Farm Power to Payfarmer, Goldvest, Emerald farms, Vestpay, H O Corn, FarmKonnect, Farmsponsor and a list of endless ventures, these platforms known for funding projects or ventures by raising money from a large number of people who contribute relatively small amounts, typically via the internet, have either defaulted or are delaying payments of investment funds, alongside Return on Investment (ROI) to investors.
In view of this, stakeholders are worried and raising questions about why crowdfunding seems to be failing in Nigeria, what the future holds for crowdfunding in the country, and whether crowdfunding really works in Nigeria?
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