FirstBank Agric Finance Overview

FirstBank Agric Finance - First Academy

• FirstBank, established in 1894, offers agricultural finance services.
• A dedicated team of Agric Finance Specialists provides support to agribusiness clients.
• This support includes developing viable business plans, acceptable financing propositions, and advisory services.
• The team also provides agricultural project monitoring support.
• FirstBank provides financing for clients in the agricultural value chain.
• This includes input supply, primary crop and livestock production, processing, logistics, and trade.
• FirstBank collaborates with development agencies like USAID, GIZ, DFID, and AFRACA to provide financing support to eligible clients.

Mandate

• The primary focus is on corporate and commercial banking clients with annual sales turnover above N3bn in the agricultural value chain.
• Technical support is also offered to clients in other business units involved in the agricultural value chain.
• The bank liaises with the CBN, Ministry of Agriculture & Food Security, and other agricultural institutions.
• Regular client engagements and presentations are held.
• The process involves market intelligence, industry updates, new agricultural initiatives, and deal structuring.
• The bank reviews and monitors its agribusiness portfolio.
• It collaborates with international institutions and development agencies to identify profitable business opportunities.
• To make retail transactions for agribusinesses attractive, obligors are grouped according to value chain characteristics (e.g., farmers groups, associations, input, production/processing).

Intervention Schemes

• Commercial Agriculture Credit Scheme: A N200bn intervention program to boost agricultural development, commencing in 2009 and ending in September 2025. This provides low-cost, long-term funding for large-scale enterprises with a minimum net asset base (excluding land) of N50m. The pricing is 9% all-in (CBN – 3%, PFIs – 6%).

• Real Sector Support Facility (RSSF/DCRR): A N300bn intervention fund created by the CBN to boost the real sector, promoting output growth, value addition, and job creation. The scheme started in 2015 and is set to end in 2030. Targets the manufacturing, agriculture, and service sectors. Pricing is 9% all-in (CBN – 2%, PFIs – 7%).

• Non-oil Export Stimulation Facility (NESF): Provides loanable funds to Participating Financial Institutions (PFIs) - comprising Deposit Money Banks and Development Finance Institutions - enabling access and re-lending to qualified export-oriented enterprises. Aims to boost exports and economic growth. Pricing is 9% all-in (CBN – 2%, PFIs – 7%).

Conventional Term Loans, SRF & Overdrafts

• Provides flexible and tailored funding to agricultural businesses for expansion.
• Supports national food security and economic development.
• Key features include maximum tenors of up to 5 years, including moratorium periods; assets' collateral (including landed property with sufficient valuation, and/or lien on commodities being funded); and customizable loan structures, tenors, and transaction dynamics.
• A minimum single obligor limit of N10 million is set.
• Loan interest rates are between 20% and 24%.
• Requirements include no prior non-performing loan history with any lending institution, a detailed business plan, financial statements (Profit & Loss, Balance Sheet), title documents backing pledged assets, and a board resolution from relevant entities.

Agricultural Loan Process Flow

• Prospect identification and initial business calls with Agric Finance Specialists.
• Documentation coordination by BU Relationship Team.
• Requests forwarded to Head Office for screening and approval.
• Request processing through FinTrak and relevant CAP teams, and input from Agric Finance Team.
• Offer Letter generation upon approval.
• Customer fulfilment of precedent conditions for loan disbursement.
• CBN involvement for intervention fund requests.
• Disbursement based on an agreed schedule.
• Meeting subsequent loan conditions.
• Monitoring of customer and project sites throughout the loan period.
• Loan repayment commences post-moratorium.