In line with banks strategy to push the nation’s Agency Banking and Agribusiness agenda, Chinwendu Obienyi takes a look into FCMB’s retail template to expound some of the directions currently being implemented in the two subject areas.
The key task of governance across the world is to provide social and economic infrastructure, protect life and property, and also create employment for the unemployed. Beyond this, however, government is still expected to manage the economy by strategically formulating and implementing specific policies that can create opportunities for sustainable economic development of the citizenry.
The need for economic development, particularly in areas of poverty reduction, employment generation and wealth creation often focuses on improving welfare and raising the general standard of living of the citizens. This has become a challenge that must be squarely guaranteed by government despite its limited resources. But to what extent can this responsibility be left to government alone in the midst of numerous competing obligations? It was indeed on the basis of the need for a vibrant partnership that FCMB believes such responsibility should not be left to government alone to shoulder.
With the benefit of hindsight arising from its 34 years of operation coupled with the fact that Nigeria is a country blessed with favourable climatic conditions, ample arable land and fertile soils, some expert solutions have been proffered that this partnership is bound to flourish. The bank has since taken a bold step towards empowering smallholder farmers as well as Micro, Small and Medium Enterprises (MSMEs), which industry watchers now define as the nucleus of developed economies’ action points. The same aspiration has been found to be in the heart of the present administration’s economic agenda even as the Federal Government said it has concluded plans to align its fiscal, monetary and trade policies to stimulate economic growth across the country.
According to the Managing Director, FCMB, Mr. Adam Nuru, it is a strategic objective of the management to partner with government in various clearly defined economic activities that directly impact positively on the people, particularly the MSME segment whose daily activities engender cohesion in the basic energy chain of the nation’s economy.
In one of the recent economic outreaches championed by the bank, Adams said, “FCMB has designed a group lending programme, which aims at creating financial awareness and empowerment for financially active women through microcredits, procurement and deployment of POS and free mobile phones among these women. The women have been identified in self-organised and homogenous groups that provide support and peer pressure to reimburse loans. It is quite innovative in Nigeria. Our focus on this aspect with the accruing benefits are the unbanked, under-banked and low income customer segments who are also being acquainted with financial inclusion.”
The bank’s key objectives in this regard include to bring financial services closer to both urban and rural small income earners. This is to enable them access loans in groups to be able to drive inclusion. The scheme also offers more flexible financial services to small income earners in the market, especially women, to increase their working capital. It is another opportunity that enables small income earners expand their asset base to finance their household needs.
The bank’s commitment in the partnership was responsible for the choice to make its operation simple when it comes to reaching out and giving access to the fund-deserving population. For the upcoming, small and medium sized businesses to benefit, prospective participants must be 18 – 60 years of age and also belong to a group. The group’s size must be five-25 members who enjoy mutual trust, confidence and respect, and live or work in close proximity to one another. The customer must have an income generating activity or business, which has been in existence for at least six months. The borrower must exhibit the potential to save. And group members are expected to be residing within a radius of 1km. FCMB is also offering free four weeks of training organised for borrowers before loans’ disbursement.
Vice President, Prof. Yemi Osinbajo, gave some hints. According to him, “government’s effort to restore growth depends very much on improved macroeconomic conditions. Accordingly, ﬁscal, monetary and trade policies are being aligned to stimulate the economy and support growth while preventing overheating.” He confirmed that sectoral policies were being implemented by the Federal Government to diversify the economy by boosting investments in agriculture, manufacturing, mining, construction and the digital economy. The Deposit Money Banks (DMBs), Osinbajo noted, were vital to the implementation of the government’s Economic Recovery and Growth Plan (ERGP).
At the donation of a robust Home Grown School Feeding (HGSF) programme web portal developed by FCMB for deployment nationwide to the Federal Government, its chief executive officer, Adam Nuru, informed the Vice President that the bank, as one of the top lenders in Nigeria, is already providing financial and technical advisory support to several operators in various sectors. He listed these to include power sector projects, export trade, SMEs, among others. “We will continue to intervene and offer support as well as provide solutions in developmental areas that would fast-track the growth of the aspirations of individuals, businesses and the country in general,” he added.
Its microfinance project from inception, had set the pace for rural and semi-urban economic prosperity and the resultant effect has been profound. That microfinance bank also developed a robust software application for online real time transaction and reporting. Establishing a centralised system of operations and loan review process, it has also commenced BVN registration for MFB clients with credit check on customers for improved loan assessment process. The microfinance bank’s operation is already berthed in 53 branches covering 11 states in five geopolitical regions. The FCMB Group Lending and Agency Banking projects are a digitised credit and savings solution, which facilitates instant account opening with debit card issuance for online real time transactions driven by Point of Sale (PoS) and mobile devices.
Mr. Ladi Balogun, the Group Chief Executive of FCMB Group Plc, was quoted to have said, “the bank’s project is driving financial inclusion in Nigeria through the deployment of agents in communities without financial service providers. The project is highly driven by technology to create a distinct offering from other existing micro lending businesses. The automation of loan processing, disbursement and repayment via PoS and/or mobile solutions ensures an efficient and swift loan disbursement and collection process.”
In the area of agriculture, it is a concern, however, that as desirable as agriculture is to economic well-being, Nigeria is yet to maximise its potential. This is as a result of a combination of factors, including its relegation to subsistence farming; non-prioritisation of agribusiness at different levels of governance; the state of infrastructure such as research and storage facilities, extension and disjointed value chains and, of course, the distraction occasioned by oil.
Fully conscious of the important role of key stakeholders in the agribusiness value chain and strong commitment in the potential of agribusiness in Nigeria, FCMB’s intervention in the sector has left a far-reaching impact on this crucial part of the economy. This has been attested to by the Chairman of Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN), Alhaji Danladi Garba, when he commended the bank for its support to the agriculture sector and farmers in Lagos. FCMB had provided funding worth N300 million to TOHFAN for the acquisition of tractors that were distributed to operators and benefiting farmers throughout Nigeria.
The bank also collaborated with Doreo Partners, an impact investing firm with a proven track record of exclusively investing in profitable, high growth, early stage businesses that improve the livelihoods of Nigerian smallholder farmers, to launch a support programme for farmers, known as BabbanGona (or great farm). This is an agricultural franchise model where farmers are trained, provided end-to-end support and offered specially packaged loans to carry out their farming activities. In line with its commitment to financial inclusion, which entails bringing the underbanked and unbanked population into the financial system, a drive which the CBN has been pursuing actively, FCMB selected a region with a high degree of financial exclusion, bringing on board farmers in the Gimba, Soba and Maigana communities. The franchise has about 18,000 farmers, developed by Doreo Partners and has a vision of reaching in excess of a million farmers in the near future.