FCMB makes impact in Nigeria’s agribusiness financing

First City Monument Bank (FCMB) is seen making far-reaching impact in financing agribusinesses in Nigeria through its interventions programmes which resulted in better access to finances by deserving individuals, organisations and companies in agricultural sector.

A major component of the Bank’s sustainability principle is on agriculture and empowering farmers with a view to reducing the level of poverty among them as part of its financial intermediation role for national development.

The bank’s intervention in agric business financing has also led to improved processes, better output and profitability. Much more, it has enhanced confidence in the ability of the financial services sector to drive economic growth.

Danladi Garba, Chairman of Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN), commended FCMB for its support to farmers and to the agric sector.

FCMB has provided funding worth N300 million to TOHFAN for the acquisition of tractors that were distributed to farmers in Kaduna state.

The Bank also collaborated with Doreo Partners to launch a support programme for farmers, known as Babban Gona (or great farm)- an agricultural franchise model, whereby farmers are trained and offered specially packaged loans to carry out their farming activities.

Fully conscious of the important role of key stakeholders in the agribusiness chain, FCMB is connecting to farmers in the Gimba, Soba and Maigana communities. The franchise comprises of about 3,000 farmers, developed by Doreo Partners an impact investing firm with a proven track record of exclusively investing in profitable, high growth, early stage businesses that improve the livelihood of Nigerian smallholder farmers.

FCMB’s selection of a region with a high degree of financial exclusion was predicated, bringing into the fold, the unbanked population in its pursuit of the CBN’s drive of financial inclusion for all.

The Bank also recently designed a series of training for this population of small-holder farmers for all-inclusive agro-finance empowerment with a primary objective of eliminating poverty, encouraging agriculture as an alternative source of economic recovery for Nigeria by enrolling 68 Babban Gona farmers in Gimba, Richifa and Ikara in Soba LGA.

The trainings have been given to beneficiaries to expand their knowledge of financial literacy in their business, with 14 additional Babban Gona farmers and 62 field extension officers getting requisite attention.

One of FCMB’s initiatives in the past was its collaboration with the International Financial Corporation, (IFC). The partnership was targeted at an investment package for the agribusiness and education sub sectors of the economy. By the agreement, the IFC was to route more lending to private businesses involved in the agribusiness sector which remains a key driver of the country’s economic growth.

The package was a long-term senior loan of $50 million and a convertible loan of $20 million aimed at supporting the bank’s growth strategy and helping it increase financing of small and medium enterprises.

Ladi Balogun, Group Managing Director/Chief Executive, First City Monument Bank Limited, had viewed IFC’s investment as a stamp of approval on the Bank’s strategy and commitment to good corporate governance and risk management.

He said, “This partnership with IFC would help First City Monument Bank achieve our strategic growth objectives”. In the same vein, Kudzai Gumunyu, Divisional Head, Agricultural Business Finance, First City Monument Bank (FCMB), while elaborating the bank’s interest in Agric financing, asserted the value of agriculture to man, stating;

“We know that Agriculture’s potential to stimulate economic growth is no longer news. It is logical to expect that agricultural financing will become an important instrument of economic policy for Nigeria, in her effort to stimulate development in all directions. Beyond this, is the fact that agriculture is the biggest employer in Nigeria and in other developing economies even as it has been demonstrated that economies that are self-sustaining in agriculture have relatively lower inflation rates. Nigeria is rich in fertile soils, good rainfall, reasonably priced labour and has a huge demand for agricultural produce owing to a large population base. It would therefore, be unforgivable if such a country does not have bragging rights as a major exporter of agricultural commodities in the world.”

Gumunyu continued that FCMB intends to maintain its partnership with players in the agric space with a view to taking advantage of the many opportunities it presents, ultimately contributing positively towards economic growth, employment creation, import substitution and economic sustainability. With regards to the fears by farmers that the turn-around time and conditions attached to some credit facilities could be prohibitive, Gumunyu allayed the fears, saying it is a positive experience with the FCMB facility. Further expressing that: “Most complaints by farmers stem from some financial institutions not understanding their businesses as they are subjected to slow approval processes yet their businesses are season-bound and need timely access to finance.

IHEANYI NWACHUKWU