FCMB supports agribusiness with N74.10bn loans
By Kayode Tokede
First City Monument Bank (FCMB) has grown its loan portfolio to the agriculture sector in Nigeria to N74.10 billion, representing a 10 per cent of the bank’s total loans.
The figure, which is one of the highest in the banking industry, showed how the lender had deepened its support to agribusiness, its value-chain and the overall growth of the Nigerian economy in 2020.
A breakdown of the N74 billion loan disbursed by FCMB to agribusiness, as at the end of December 2020, shows that the Bank’s Corporate Banking group gave out N38.82 billion, which represents 52.40 per cent.
On a regional basis, the South-west disbursed N19.06 billion; Lagos region, N11.11 billion; South-east and South-south, N3.06 billion, while Abuja and North region disbursed N1.10 billion.
Analysts have already seized on this achievement, expressing broadly positive views of its impact on both FCMB and stakeholders in agribusiness.
An operator described it as: “A positive move and a statement of intent from FCMB to effectively position and benefit more from the current and emerging opportunities in the agric sector to drive business and national prosperity.”
FCMB is seen as making a far-reaching impact in agribusiness funding and capacity building through its various intervention programmes, including in the areas of digitisation and agritech.
These actions have resulted in better access to finance, research and manpower development by deserving individuals, farmers, organisations and companies in the agric sector, with a multiplier effect on the economy.
A major component of FCMB’s sustainability principle is agriculture, with a clear focus on creating employment and empowerment opportunities, especially for farmers, to reduce the level of poverty.
The Bank’s intervention in agribusiness financing has led to improved processes, better output, profitability and enhanced confidence in the ability of the financial services sector to drive economic prosperity.
The lender has consistently upscaled its funding and technical support to major companies in the agric sector. For instance, FCMB extended a N20 billion loan to Olam International to bolster its operations and productivity.
The Bank also played a significant role in the establishment of the company’s 36,000 metric tonnes (per annum) capacity milled rice facility located in Nasarawa State, thereby contributing to the Federal Government’s goal to achieve rice output self-sufficiency.
Flour Mills Plc, the largest miller by market capitalisation in Nigeria, equally received $30 million credit facility and N1.50 billion overdrafts from FCMB to help support its working capital.
Funding worth N300 million was provided some years ago by the Bank to Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN) for the acquisition of tractors that were distributed to farmers in Kaduna state.
In realisation of the gap that exists in agribusiness financing as well as other challenges, FCMB has in place an enhanced agro-commodity trade finance facility for agribusiness operators.
The revamped facility is designed for agro-commodity merchants with supply contracts to multinationals, large corporates and processors of agro-commodities. Targeted commodities are cocoa, cashew nut, sesame, ginger, palm Oil, grains (maize, sorghum, soya beans, and paddy rice).
Under this trade finance facility, which is structured in the form of working capital, the minimum amount that can be accessed by a qualified customer is N100million, while the maximum is N2billion.
Commodity producers and traders stand to benefit immensely from this facility because it is a veritable and convenient opportunity to access funds. This ensures consistent cash flow for maximum productivity all through the farming season.
