Farmkonnect Review: A Legit or Scam Agro Investment?

The first time I heard about Farmkonnect, I was very interested and the opportunity seemed genuine and innovative.

However, on a closer look, there are many things involved that are worth considering before you invest your hard-earned money.

In this article, we’ll be looking at the Farmkonnect Agri-tech Investment, the opportunity, the risks, and if it is worth investing in.

It’s all a matter of investment perspective, and I’ll be giving mine here. So, let’s dive in.

How Does Farmkonnect Work?

Farmkonnect is a pioneer of Agricultural real estate in Nigeria. The company, which is registered with the CAC as Farmkonnect Agricultural Input Services Limited, is propagating the growth of greenhouse farming in Nigeria through its public-sponsored agri projects.

The company runs 2 agricultural projects, namely:

  • Wave City Project: Through its wave city project, Farmkonnect is building and managing a range of greenhouse farms for high demand cash crops. Using investors’ funds, the company sets up different ranges of greenhouse farms, and manages the farm through the planting stage to the harvesting and sales. Investors get a return every six months.
  • Egbeja Snail Village Project: Through its Snail Village project in Ekiti State, Farmkonnect is propagating the growth of indeginous investment in snail farming. Using investors’ funds, the company sets up a range of snail farms, manages the snail development and sales, and gives its investors a return every six months.

Farmkonnect Packages

  • Patch Package: The Farmkonnect Patch Package is a 10sqm greenhouse which is available for sponsorship with N175,000. Investors get to earn N35,000 every 6 months for 10 years.
  • Half-unit Package: The Farmkonnect Half-Unit package is a 50sqm greenhouse which is available for sponsorship with N800,000. Investors get to earn N175,000 every 6 months for 10 years.
  • Unit Package: The Farmkonnect Unit Package is a 100sqm greenhouse which is available for sponsorship with N1,500,000. Investors get to earn N350,000 every 6 months for 10 years.
  • Cluster Package: The Farmkonnect Cluster Package is a 400sqm greenhouse which is available for sponsorship with N5,800,000. Investors get to earn N1,400,000 every 6 months for 10 years.
  • Enclave Package: The Farmkonnect Cluster Package is a 2,000sqm greenhouse which is available for sponsorship with N27,500,000. Investors get to earn N7,000,000 every 6 months for 10 years.

How to Invest in Farmkonnect

To invest in Farmkonnect, you have to sign up on their website, create a suitable profile, choose your preferred Farmkonnect package and make your investment.

They also have offices at Lekki in Lagos and Basorun in Ibadan. I’m not quite sure you can visit them at their offices though. Most of these investment companies are known to utilize virtual offices in order to cut costs. 

However, you can contact them on the phone numbers available on their website.

The company claims that it would require an initial period of 3 months after investment to set up a farm, which means that investors would usually get their first payment after nine months of investing.

The Farmkonnect Opportunity

The Farmkonnect agri-tech Investment opportunity is structured as a long-term investment portfolio. Investors get to receive cash flow biannually for 10 years, which can represent a significant stable income opportunity.

However, the longevity of the Farmkonnect business itself may not be guaranteed for those 10 years. 

What happens if the company packs up or files for bankruptcy before the proposed 10-year tenure of an investment? That is worth considering before making an investment.

Risks Involved With Farmkonnect

Despite the fact that the Farmkonnect agri-tech investment represents a significant opportunity to support the agricultural industry and make long term cash flow, there are some accompanying risks that are worth looking into.

Firstly, I think the Farmkonnect investment structure is not as liquid as I’d like. While promising returns for 10 years may be interesting for many investors, we have to consider the strength of the guarantee of the company involved.

Farmkonnect as a brand doesn’t yet represent a strong reputation in the industry, and as such, their promises should be taken with a pinch of salt, until they prove their mettle over the coming years.

Also, when you consider that it takes an average of 3 years to get your money back and break even, coupled with Nigeria’s raging inflation, you’d see that there is a significant risk involved with investing with Farmkonnect.

For example:

If you invest in Farmkonnect’s Patch package, which is the minimum investment package, you’ll make a one-time outlay of 175,000 Naira. In return, you’d get 35,000 Naira every six months for the next ten years. That’s 70,000 Naira per year. 

In two years, you’d get a return of 140,000 Naira. With this return, you’d still have a deficit of 35,000 Naira.

In the first half of the third year, you’d have gotten your investment back with no return yet. But by the end of the third year, you would get on a measly 35,000 profit on your investment.

So, with the Patch package, you would break even in the third year, with a profit of 35,000 Naira.

Let’s consider another package.

If you invest in Farmkonnect’s Enclave Package, which is their highest package, you’d make a one-time investment outlay of 27,500,000 Naira. In return, you’d get 7,000,000 Naira every six months for the next ten years. That’s a return of 14,000,000 Naira per year.

This means, by the end of two years, you’d get a return of 28,000,000 Naira. With this return, you would break even with a profit of 500,000 Naira.

Considering the fact that there is no guarantee of return of investment with Farmkonnect, investing to get a capital return in two years is a very risky venture.

Is Farmkonnect A Scam?

Considering that most scams are not deciphered until they unveil themselves, you cannot tell if Farmkonnect is a scam or not.

But the company has done some due diligence to allay any indication of being a scam. 

Firstly, the Farmkonnect brand is a duly registered company in Nigeria, with the company name FARMKONNECT AGRICULTURAL INPUT SERVICES LIMITED, and RC Number: 1753150.

Farmkonnect also insures its farms and facilities with Leadway Assurance, using the company  name FarmKonnect Agribusiness Nigeria Limited.

The leadway insurance covers Farmkonnect’s Tomato crop, Chicken Poultry, and 5 tunnel greenhouses.

However, the Leadway farm property and farm produce Insurance used by Farmkonnect does not cover individual investments. It only covers loss or damage to agricultural produce and the property stored at the insured’s warehouse, arising from insured perils such as burglary, theft, fire, and flood. Note that this insurance doesn’t cover pest infestation.

This effectively means that there is no insurance or guarantee on your investment if Farmkonnect files for bankruptcy tomorrow or if Farmkonnect’s farms and crops get infested by pests, or if their poultry or livestock get diseased and wiped out. In any case, you’ll lose 100% of your investment.

Essentially, the Leadway Insurance basically secures only Farmkonnect’s assets and not their investors’ funds.

Is Farmkonnect Worth the Investment?

First of all, there are a few things you should consider before deciding if Farmkonnect is worth the investment.

Firstly, your capital investment into Farmkonnect is not guaranteed or insured.

Secondly, the average timeline for return of capital or investment is 3 years, which is a long time to keep your money with a company.

Thirdly, Farmkonnect does not have a strong industry reputation yet, to back its assurance or profit claims.

Now, if you choose to take the risk, it should be on the basis that Farmkonnect has at least made some effort to provide some level of insurance on their investment, and also that you are willing to lose your investment in the case that Farmkonnect defaults on payment or files for bankruptcy. 

Before deciding to invest in Farmkonnect, it is important to note that there is a possibility for Farmkonnect to default on their promise to pay back returns on investment. 

Don’t just take their word for it. The possibility is there, which means that it can happen. According to Murphy’s law, “if anything can go wrong, it will go wrong”. To paraphrase this, if there is a possibility to lose your money with Farmkonnect, you will lose your money.

Now, consider these facts:

  • Farmkonnect can default on payments of returns if they want
  • Farmkonnect can file for bankruptcy if they want
  • Investors deposit or investment with Farmkonnect is not insured
  • Farmkonnect is not registered with the SEC
  • Farmkonnect investment is not liquid (3 years average ROI tenure is too long)

To be honest, a lot can happen in 3 years to either the Farmkonnect company or to you as an investor. What then happens to your capital or investment?

Now, Should You Invest In Farmkonnect?

To be honest, with the above facts, I consider Farmkonnect too risky to invest in. Not only is there no guarantee on your investment, it takes a long time to get back your capital not to talk of your returns on investment.

If Farmkonnect offered monthly, biannual or annual returns that are structured to return 100% of investors’ capital in one year and then subsequently pay out ROIs and profits, then it would have been worth the risk for me.

Instead, the company chooses to spread investors’ returns by paying a small percentage of the ROI over 10 years, which is really a suspicious move to me. Considering that the majority of Farmkonnect’s farms comprises tomatoes, poultry and snail, which have short nurtural seasons, Farmkonnect should be able to help investors get profitable within 2 years at most.

Final Verdict

In my opinion, Farmkonnect is a very risky investment and I wouldn’t be investing any money that I’m not willing to lose. 

However, if you decide to take the risk and invest in Farmkonnect, then you should do that with the knowledge that you could lose 100% of your investment.

Investing in Farmkonnect can only be carried out with no hedge, no insurance and no guarantee whatsoever that you would be getting back your capital not to talk of receiving any ROI. 

Savvy investors don’t invest in these types of investments, and you shouldn’t if you are smart enough.  

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