Kapitalgrow: Agric Produce Package
Investment model: Mudharabah contract
Agric Produce involved: Kolanut, Bitter Kola and others
Projected return: 29%
Investment cycle: 7 months
Total capital: N10,000,000
Amount per investor: Min – N10,000 Max – N2,500,000
About the investment
The investment is a commodity trading structured as Mudharabah contract (Profit Sharing Contract) where investors are invited to subscribe to the investment project to fund the AgricProduce Merchandise Package. The investors are ‘Rab al Maal’ while Kapitalgrow serves as ‘Mudharib’ (Managing Trustee). These are the only two parties to the Mudharabah contract.
In executing this project, Kapitalgrow performs the following major activities:
1. To offtake/purchase the agricultural produce directly from farmers thereby providing financial liquidity to the farmers and saving them the hassle of marketing and sales
2. To store these produces in grade A storage facilities for optimum preservation of the food nutrients
3. To market and sell the agricultural produce for industrial or consumer use
1. Total Investment Outlay (TIO)
Total amount required from investors is ten million-naira (N10,000,000) to be raised within a
month commencing on the release date of this investment project.
Minimum per investor is Ten thousand Naira only (N10,000)
Maximum per investor is Two million five hundred thousand only (N2,500,000)
Note: Withdrawal after the commencement of investment project activities is not allowed. This is
to allow successful completion of the investment project without any interruption to plans.
Investment project activities will commence immediately after the required capital is raised (i.e a
month after release date of the investment project). In the event of not raising up to the required
amount in a month, Kapitalgrow will scale down on the project and commence based on the
capital raised. No effect on projected return!
2. Investment Maturity
The entire end-to-end activities required to execute the investment project as highlighted in section 1 above will last for 6 months excluding one month for capital raising.
Hence, the investment total cycle period is 7 months.
3. Return Expectation and Distribution
The profit earned will be shared equally between the investors and Kapitalgrow, that is, in 50:50
ratio after deduction of direct expenses.
We expect the investment to generate 29% ROI to the investors.
Any return generated in excess of our projection will further be shared equally between
investors and Kapitalgrow.
If unforeseen condition suggests otherwise, losses are borne by investors only unless
Kapitalgrow is found to have transgressed or negligent in its responsibility. We have however
put necessary risk management practices in place to mitigate the possible risks identified and
ensure projected return is realized. (See section 4)
4. Risk Management
Our assessment identified risks of possible theft, fire outbreak, delays in turnover of produce and other Force Majeure that may likely affect our expectations.
For the risks identified above, we will be leveraging our adequate market knowledge to
successfully deliver value for all parties.
Other risk mitigations in place are as below:
a. Secured and top-class storage facilities to mitigate possible theft and fire outbreak
b. Safe location of storage facilities for proper and effective preservation of agricultural
c. Forward purchase agreements with companies/processing firms to mitigate delay in sales.
5. Project Management and Monitoring
The overall responsibility of the project lies with Kapitalgrow.
The duties and responsibilities of
Kapitalgrow include the following:
a. Management and monitoring of the entire project from start to finish – Off taking,
Storage, Preservation, Marketing and Sales.
b. Conduct regular visit on the site and location of the produce
c. Give periodic update to our members on the progress of the investment project.
d. Prepare financial record and distribute amount invested plus return to the investors at
the liquidation of investment.
As the Mudharib (Managing Trustee), the project
management is our responsibility and any cost incurred that are
indirect and non-deductible from the Mudharabah Fund.
6. Exit Plan/Project Wrap Up
The liquidation of investment project is done at the maturity. The financial performance is
measured after deducting the direct cost and a financial record is prepared and shared with the
Amount invested by investors plus any returns will be transferred to the investors at maturity of
the investment and the investment project is closed.
PS: It should be noted that this investment capital and return are not guaranteed but we have
put necessary risk mitigations in place to ensure the projected return on investment is realized.
(See section 4)