Presentation on Bank of Agriculture Nigeria

1. INTRODUCING
BANK OF AGRICULTURE:
Presentation to House of Representatives Committee on Agriculture
Mohammed K Santuraki
Managing Director/CEO
Improving lives, Growing Communities 1

2. 2

3. 3

4. PRESENTTION OUTLINE
 Our Corporate Profile
Our Mandates
Activities Supported
Agricultural Value Chain
Delivery Channels
Our Products & Services
Credit Products
Savings Services
Non-Funded Products
Our Social Impacts
Our Strengths
Our Challenges
Our Future Plans
Conclusion
4

5. CORPORATE PROFILE
The bank has evolved from Nigerian Agricultural Bank Limited in 1972 to Bank of
Agriculture (BoA) Limited in 2010
Peoples Bank • Launch of ‘Project
Changed
of Nigeria Octopus’ – loan
Incorporated name to
(PBN) is recovery strategy
as Nigerian Nigerian NACB has150
Agricultural Agricultural established to branches • Bank-wide
Bank Limited Cooperative provide micro- nationwide resizing with a
(NABL) Bank (NACB) credit to urban ‘golden
and rural poor handshake’
1972 1973 1978 1980 1990 1997 1999 2000 2008 2010
Nigerian
The Family Economic
Agricultural • Changed name
Began operations Advancement
Cooperative Rural
providing short, NACB had a Programme (FEAP) to Bank of
Development Bank
medium- and long- network of 67 was established to Agriculture
(NACRDB)
term loans for branches and provide micro-credit (BoA) Limited
emerged from the
to the low income
agricultural 6 zonal offices merger of NACB
groups through both • Has 201
purposes to and PBN as well as
public banking branches with
Nigerians the acquisition of
institutions and 1,558 staff
the risk assets of
commercial banks
FEAP.
5

6. CORPORATE PROFILE (2)
• The Nation’s largest DFI, agricultural and rural development finance Institution
– 11-man board , including 4 executives
- Staff strength – about 1200
---201 branches, 6 zonal offices and a Head office in Kaduna
• Limited liability company
– MOFI -60% share holding
– CBN- 40% shareholding
– Supervised by Federal Ministry of Agriculture and Rural Development
(FMARD)
6

7. CORPORATE PROFILE (3)
• Our Authorised Share Capital is N50 billion
• About N30 billion has been paid up , leaving a
balance of N20 billion unpaid
• Board structure:
– 11-man board , including 4 executives
Staff strength – about 1200
201 branches, 6 zonal offices and a Head office in Kaduna
7

8. OUR MANDATES
• Key Mandates
– Provision of agricultural credit and non-agric
rural finance
– Rural savings mobilisation
– Capacity development
• Cooperative development
• Agricultural information systems
• Provision of technical support and extension services
8

9. AGRICULTURAL VALUE CHAIN
• Agricultural Input
Manufacturers/suppliers
• Farmers/Producers
• Agricultural Commodities Storage
& Marketing
• Agricultural Commodities
Processing
• Industrial Manufacturers
• Trade and Exporters.
9

10. AGRICULTURAL ACTIVITIES
SUPPORTED
• Arable/field crops
• Tree Crop Plantation
• Market Gardening
• Livestock and Dairy
• Fisheries & Aqua-culture
• Horticulture
_______________________________
• Agro-input Supply
• Commodities Marketing
• Agro-processing
• Agri-business
• Other Agro-allied
10

11. OUR CREDIT PRODUCTS (2)
Direct loans: On lending/Wholesale:
• Micro agric • State Governments
• Micro non agric • MDAs
• SMEs • Cooperatives
• Agribusinesses • Farmer/Trade Groups
• Self Help Groups
• Micro Finance Banks
( MFBs)
• Micro Finance Institutions
( MFIs)
11

12. OUR CREDIT PRODUCTS
PRODUCTS VOLUME BAND
DIRECT LOANS
Micro-loans
Agriculture Up to N250k
Non-Agric Up to N250k
Marketing Up to 250k
SME Loans/Agro-allied Up to N30m
Agribusiness Loans
ON-LENDING
States Negotiable
MFBs Negotiable
COLLABORATIONS Negotiable
12

13. DEPOSIT SERVICES
• Savings Accounts
• Target Savings
• Fixed Deposits
• Lien deposits
____________________________________________
We have extensive opportunity to expand services in this
area. Our average core deposit liability is about N6B, while
we have turned over about N370B since inception
13

14. NON FUND SERVICES
 Advisory role to prospective customers
 Dissemination of research findings
through workshops and training sessions
 Organise workshops in collaboration
with other agencies, e.g. in areas of
employment generation and wealth
creation potentials.
14

15. OUR SOCIAL IMPACT
KPI 2002-Nov 2011 Jan-Nov.2011
Loan disbursement N44 B (US$293m) N2.7 B(US$18m)
Enterprises financed 550,000 16,000
Employment generation 5.5 million 162,000
Loan repayment N35B (US$267m) N4B (US$24M)
Repayment rate 76% 70%
Savings turnover N391 B (US$2.5B) N 27.1B (US$184m)
Accounts opened 2.1 million 25,421
Collaborations 27(N5.2B), 74,000 2(N396m),
Cooperatives 9,676 176
formed/supported
Capacity building 8 Nil
15

16. OUR CURRENT PORTFOLIO
LOAN TYPES AMOUNT (N) Proportions BENEFICIARIES
Micro loan 10.2B 58% 12,409
Macro Loans 4.7B 27% 63
On-lending 457.6m 3% 135
Special Projects 2.2B 12% 2,640
TOTAL 17.6B 100% 15,112
16

17. OUR STRENGTHS
 Enormous experience and expertise in
agriculture and agro allied industry, rural
finance.
 Government ownership through CBN and
MOFI
 Very wide national spread- 201 branches, 6
Zonal offices and a Head office
 Deep history and well known brand
 The only national institution focused in
agricultural and rural finance
 Extensive untapped opportunities in Nigeria
agriculture.
 Extensive Real estate holdings that we can
leverage on to provide financing.
17

18. OUR CHALLENGES
• Lack of Lending resources
– BoA is undercapitalised by about N20Billion
– Need to recapitalize the bank to N100B
– Government to provide intervention funding to address food
security, employment generation and wealth creation
– Government Funding support and engagement with NDFIs is
lopsided
• We would like to see higher level of engagement by our stakeholders
• Public attitude to DFI’s loan servicing
• Relevant institutions need to provide other forms of support to farmers;
extension services, input supplies and fixing of the value chains.
18

19. OUR FUTURE
Our Key challenge is to create a
more sustainable institution,
while ensuring the bank’s
mandate retention.
Our approach:
 Improving the Bank’s internal
efficiency
 Reviewing the Bank’s operating
Model
19

20. OUR FUTURE (1)
• Improving Internal Efficiencies
– MODERNIZATION
• Rebranded
• IT enhancement
– CAPACITY BUILDING
– Other Initiatives
• Strengthening of Control & Risk Management
• Resizing the Company
• Outsourcing of non-core services
• Rationalization of non-core assets
20

21. OUR FUTURE (2)
• Reviewed the operating model to make the
institution more sustainable:
– Creation of NMFB Subsidiary
– Strategic partner/investor required
– Strengthening of wholesale window
– New focus on savings mobilization
– Expanding delivery channels: mobile money,
agent banking and Group lending
21

22. CONCLUSION
TO RECAP KEY TAKE-AWAYS
•Corporate Profile • We are refocusing, reforming &
•Our Mandates repositioning the bank
• Lack of lending resources
•Our Products &
– Full capitalisation
Services
– Increased capitalisation to N100 B
•Our Social Impact – Provision of Agriculture Intervention
•Our Strengths Funds of N200B
•Our Challenges • We would like to see a higher level of
engagement by CBN, MOFI,FMA & other
•Future Plans MDAs in sector interventions.
• There is need to rationalize the mandates
of National DFIs to minimize overlaps.
• Currently funding support o National DFIs
is lopsided
22

23. THANK YOU FOR LISTENING
Bank of Agriculture Limited
1 Yakubu Gowon Way, Kaduna, Nigeria
Tel: I Mobile I
www.bankofagricultureng.com
23