The participation of First Bank of Nigeria Plc in the Commercial Agricultural Credit Scheme (CACS) is driven by its commitment to support Government’s efforts towards the attainment of food security and economic diversification.

It is this same commitment that prompted the Bank to develop and introduce “Farmers First”, a suit of agricultural financing solutions specially designed to help small scale farmers to access funding, link them with industrial end-users of their products, and promote agriculture as an attractive profession and business to youths.

The Banks’ commitment to the agricultural sector is rooted in the firm belief that agriculture is very important to the nation’s economic development. Hence it has been participating in various government initiatives to boost lending to the sector.

For example, the Bank participated and exceeded expectations in the Agricultural Credit Support Scheme (ACSS) initiated by the Obasanjo administration to increase banks’ lending to the sector by N50 billion.

“Although we were supposed to lend N2 billion, we did N3.7 billion”, thereby demonstrating our status as major stakeholders in the agricultural sector. We don’t do things only because of government policy but because of our passion for the sector”, The Bank said.

•Onasanya, GMD/CEO First Bank

Consequently, when the CACS was introduced in 2009, the bank embraced it as an opportunity to further demonstrate its passion for the sector and contribute to its growth.

Thus, the Bank has funded 31 commercial agricultural businesses with loans amounting to N12.85 billion. The businesses funded by the Bank cover all the eligible activities specified under the scheme and the entire value chain.

This include livestock production, poultry farming, fish farming, crop production and crop processing. The Bank also supported businesses in stock piling and marketing of produce, animal husbandry, processing and marketing.

The Bank’s funding support has been guided by the objective of the scheme, which is to increase the scale of agricultural production in the country. Thus, agricultural businesses supported by the Bank have either doubled capacity or improved production efficiency.

“For example we have poultry projects that have the capacity for ten thousand layers that are currently running on forty thousand layers”, said Ernest Ndubisi Ihedigbo, Head of Agric Finance Department, FirstBank

On how the Banks’ funding support is enhancing agricultural businesses through the scheme, he said We have crop processing businesses like vegetable oil extraction projects that have had to increase crushing capacity from barely one thousand tonnes of grain to about five thousand tonnes of grains and to be able to do this they have had to invest in new equipment, new machinery and new infrastructure and have had to expand their staff complement.

Some of the businesses have even engaged expatriate management in other to fully manage the new scale of operation as a result of this scheme. And some have invested in completely new technology, something completely different from what they are used to.

For example in the poultry sector, we have businesses  who were operating simple deep litter layer farms that have now converted into closed bio-security houses with tunnel ventilation and automated waste removal, automated feed, automated egg collection and automated egg grading functions fully built up, which is a complete departure from what they were doing.

So aside from the fact that the expanded scale in terms of the number of birds they can raise,  the system of production has also been changed with  up to date technology, enhancing not only  output   in terms of volumes but also production efficiency as well.

Then in the area of vegetable oil processing like I mentioned, we have funded businesses that have had to shift from ordinary mechanical extraction of pure vegetable oil to solvent extraction which is the latest technology. With solvent extraction their extraction rates are higher and they are making more profit relative to when they were doing mechanical extraction.

And in terms of crop production too, our Commercial Agriculture Credit Support has helped businesses to increase their fleet of tractors and some have introduced irrigation facilities.”

FirstBank is also impacting the agricultural sector through its Farmers First suite of agricultural financing products, designed to address the need of the retail- end of the sector.

Launched in 2007, it comprises six products namely Guaranteed Fund  Credit, the Industrial End-User Out Grower Scheme, the Agricultural Produce Finance, the Cooperative Linkage Banking Scheme, the First Bank Agricultural Credit to Schools and Multi-Channels Agricultural Finance Scheme.

Each of these products was structured to address some of the known constraints of small scale farmers in accessing credit. These constraints revolve around acceptable collateral, interest rate, tenor of credit as well as obligor type.

The products were designed to provide solutions for the small scale farmers who on their own may not be able to qualify for the bank’s conventional term loans and overdraft for large scale investment in agriculture.

Guaranteed Fund Credit (GFC): The Guaranteed Fund Credit (GFC) enables farmers to access credit facility of up to N1million even when they can only provide 25% cash security cover and a guarantor. Farmers with collateral can access as much as N10million under this scheme.

The Guaranteed Fund Credit provides credit for various agricultural enterprises under a guarantee fund model. It derives its essence from the Agricultural Credit Guarantee Scheme of the Central Bank of Nigeria.

It enables farmers to enjoy a refund of up to 40% of interest paid on credit facilities under an Interest Draw Back Programme sponsored by the Federal Government and CBN

Multi-Channels Agricultural Finance Scheme (Multi-CAFS): The product farmers helps ease the cash flow problems of salary earners involved in farming as it provides working capital support for the small scale farming activities of salary earners. Such farming activities are pursued alongside with regular paid employment as a means of augmenting household income.

Credit facilities granted under this programme can be repaid from the monthly salary, the farm operation, and any other income generating activity of the farmer.

FirstBank Agricultural Credit To Schools (FACTS): This products provides working capital loans to secondary schools and tertiary institutions with agricultural and agro-allied projects.

It facilitates the commercialization of school farm projects/ businesses in secondary and tertiary institutions that have agricultural science programs, demonstration/ pilot farms, bakeries or related projects.

Although serving primarily to impart knowledge to students, such school projects provide an avenue for the schools to diversify their sources of revenue in the face of insufficient funding. It also stimulates interest in agribusiness and the agricultural profession among youths.

Very recently, FirstBank introduced an innovative tractor/ farm machinery finance scheme called “FirstTRAC”. This is deliberately designed to move tractor service away from government to a sustainable and purely private-sector led initiative.

The objective is to drive farm mechanization by increasing average tractor density per hectare, expand average farm holding and output per farmer and eliminate drudgery in farming. This initiative is being implemented in partnership with DFID-PrOpCom.