FirstBank Agric Finance Overview

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Questions and Answers

What is the minimum single obligor limit for the Agricultural Loan product?

N10m (correct)

N15m

N20m

N5m

What is the maximum tenor for the Agriculture Loan product?

5 years (correct)

4 years

6 years

3 years

What is the interest rate band for the Agricultural Loan product?

10-14%

20-24% (correct)

15-19%

25-29%

What are some of the requirements for accessing the Agricultural Loan product?

A business plan including cash flow projection, marketing plan, repayment plan, draw down schedule, Profit & Loss and Balance Sheet projections (D) Signup and view all the answers

Who is the target market for the Agricultural Loan product?

Medium and large-scale agricultural businesses (D) Signup and view all the answers

What is the role of a Business Unit (BU) Relationship Team in the loan process?

They coordinate documentation and obtain necessary sign-offs. (C) Signup and view all the answers

What is the role of the Agric Finance Specialist?

They conduct the initial business calls with prospects. (D) Signup and view all the answers

What happens once a loan request is approved?

An offer letter is generated and forwarded to the customer for execution. (D) Signup and view all the answers

What is the pricing for the Real Sector Support Facility (RSSF/DCRR)?

9% all-in (CBN - 2%, PFIs - 7%) (A) Signup and view all the answers

What is the role of the Central Bank of Nigeria (CBN) in the loan process?

The CBN is involved in the disbursement of funds for intervention funds. (B) Signup and view all the answers

What is the purpose of the Commercial Agriculture Credit Scheme?

To fast track the development of the agricultural sector. (A) Signup and view all the answers

What are some of the collateral requirements for the Agricultural Loan product?

A lien on assets/commodity being financed (C) Signup and view all the answers

Which of these schemes targets the manufacturing, agriculture, and service sectors?

Real Sector Support Facility (RSSF/DCRR) (C) Signup and view all the answers

Which of the following is NOT a benefit of the Conventional Term Loans, SRF & Overdrafts?

Provides low cost funds to large scale agricultural enterprises (B) Signup and view all the answers

Which scheme has a special intervention fund of N300 billion?

Real Sector Support Facility (RSSF/DCRR) (D) Signup and view all the answers

What is the purpose of the Non-oil Export Stimulation Facility (NESF)?

To reposition export and increase its contribution to economic development (A) Signup and view all the answers

Which of these schemes has a 9% all-in pricing, with the CBN contributing 2% and PFIs contributing 7%?

Non-oil Export Stimulation Facility (B), Real Sector Support Facility (RSSF/DCRR) (D) Signup and view all the answers

Which scheme has a special intervention fund of N200 billion and a minimum net asset base requirement of N50m'?

N200bn intervention for large-scale agricultural enterprises (A) Signup and view all the answers

What is the primary focus of Agric Finance - First Academy?

Supporting agribusiness clients with business plans and financial propositions (A) Signup and view all the answers

Which organization(s) does Agric Finance - First Academy collaborate with to provide financing support?

USAID, GIZ, DFID, and AFRACA (A) Signup and view all the answers

What is a key step in Agric Finance - First Academy's process of developing new agricultural initiatives?

Identifying viable business opportunities (A) Signup and view all the answers

What is Agric Finance - First Academy's approach to making retail transactions attractive?

Grouping farmers together into associations for collective financing (A) Signup and view all the answers

What is the minimum annual sales turnover requirement for Agric Finance - First Academy's corporate and commercial banking clients?

N3 billion (D) Signup and view all the answers

What are some examples of agricultural value chain areas that Agric Finance - First Academy provides financing for?

Input supply, primary production, processing, logistics, and trade (C) Signup and view all the answers

What is one of the key aspects of Agric Finance - First Academy's mandate?

Liaising with international development agencies and institutions (D) Signup and view all the answers

What is a critical aspect of Agric Finance - First Academy's approach to providing financing to clients?

Developing a clear value chain for clients and their products (A) Signup and view all the answers

Study Notes

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.

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Description

Explore FirstBank's Agric Finance services, established to support agribusiness clients since 1894. Learn about the specialized team that assists with business plans, financing propositions, and project monitoring along the agricultural value chain. This quiz will enhance your understanding of collaboration with development agencies and financing options available for agribusinesses.