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  • Business - Companies
  • Updated: October 07, 2020

New Development Arises That Might Collapse Thrive Agric's Operation

New Development Arises That Might Collapse Thrive Agric's Op

There's currently a red flag hovering above Thrive Agric as new revelation from the agric investment startup's insurer, Leadway Assurance, will make it difficult for Thrive Agric to survive the current financial crisis and public distrust their company faces.

Background Information

AllNews had reported that Thrive Agric was accused of operating in ponzi scheme fashion after the small agric investment company hoard investors money, failing to pay return on investment on the due date. The amount owed to investors is estimated in millions of naira.

The company - which operates rice farm, poultry and other farm produce - is said to be conveying false business growth in order to lure unsuspecting individuals to invest in their agric business which is not yielding profit, only to hoard the principal fund and the interests on investment when the time comes to pay up.

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Investors have been demanding their money, and issued 5-day ultimatum, but Thrive Agric said COVID-19 affected its operations and it can't afford to pay investors their principal fund and interest fee until the next one year or two years at most.

New Development That Might End Thrive Agric

Leadway Assurance distanced itself from claims that Thrive Agric's farm business is fully covered by their insurance company. Thrive Agric's selling point, just like any other agric investment startup, is that the investment of their investors are insured.

However, Leadway Assurance denied this claim, stating that investment from investors are not insured by their insurance company, as only farm assets are covered by their insurance. Leadway said their insurance duty is limited to Thrive Agric's agric tech platform, and not extended to individual investors.

This means the funds invested in Thrive Agric is not insured by Leadway Assurance, therefore, the principal payment made by investors is not covered by insurance, "Leadway only provides insurance cover for the farm assets of its insured agric platforms.

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"This, therefore, means that we only provide cover using our agric based insurance solutions for the risks to insured farms and other farms assets against perils stated in the insurance policy document issued." Leadway said in a statement obtained by AllNews.

The insurance firm added, "As we have stated repeatedly, Leadway Assurance does not in anyway guarantee the safety of investors funds if lost due to agric-business failure. Investors funds and the returns thereof are not covered as the subject of the insurance policy Leadway provides."

How This Financial Crisis Will Affect Thrive Agric

The realisation that insurance cover doesn't include the investment of investors will be a wake-up call for many individuals investing in agric investment platforms or planning to invest.

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Also, the difficulty in investors getting their principal and interest fees back will affect the brand of Thrive Agric in the agric investment market, as individuals will be discouraged to invest in Thrive Agric, and instead go for its rivals.

The agric investment market in Nigeria is becoming saturated to the extent that any mistake or investor criticism could be costly for any agric investment platform. The number of agric crowdfunding platforms is rising as acceptance grows.

The likes of Farmcrowdy, Groupfarma, Farmsponsor, Requid and many other are competing head-on in a country where trust for online investment is low - so such intense market base leaves no room for doubt, as it could be the undoing of an investment platform.

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