“our success story in agribusiness financing...
TRANSCRIPT
1
__________________
Presented by:
Ngenzi Sylivester
Corporate Agribusiness Unit
CRDB Bank Plc, Head Office
Dar es Salaam
Twenty years (20) of growth
(1996-2016)
“Our Success Story in Agribusiness
Financing ”
1996CRDB Limited
2016CRDB Bank
PlcListed to DSE
CRDB Burundi S.A
& MFCLBranchless Banking
Strategic Alliance
Awards
189 Branches
1998 ‘Stepped-in Dr.C.Kimei’
•Agri-Desk•China Desk•India Desk
TPBTHCBL
ATM-Over 50013 Branch On WheelsMobile Banking- ‘Sim’
Fahari Huduma Agents-1800M-wallet & Digital Banking
OUR ACHIEVEMENTS FROM 20 YEARS OF GROWTH
2,600 Employees
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Banking Industry Perfomance Assessment-June 2014
Total Assets
Loans andAdvances
TotalDeposits
-
1,000
2,000
3,000
4,000
5,000
6,000
Banking Industry Perfomance Assessment-June 2015
TotalAssets
LoansandAdvances
TotalDeposits
‘Year 2015’CRDB Bank is the market
leader in Asset base, Deposits; Loans and
Advances. Second run-up for profit
‘Year 2014’CRDB Bank is the market
leader in Asset base, Deposits; Loans and
Advances. Second run-up for profit
CRBD
CRBD
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
1 2 3 4 5 6 7
TZS 'Bln'
TZS 'Bln'
2009 201520112010 201420132012
254
477 454423
494
667
326
OUTSTANDING AGRICULTURE /AGRIBUSINESS PORTIFOLIO AS AT YEAR
END (TZS IN BILLIONS)
Comment: Growth in NPL in year2015 was attributed by poorperformance of Mtibwa SugarCompany Limited as well as fromselected cooperatives in Tobaccoportfolio, including Tobacco portfoliofrom Microfinance (CMSCL)
Performance indicators of Agriculture portfolio
Comment: Agriculture portfolio andrevenue, both grew positivelydespite not picking a steady growth.Overall growth in portfolio (2014 to2015) largely came from growth infew sub-sector such as Sugar, Cottonand grains.
OUR ACHIEVEMENTS IN AGRIBUSINESS FROM 20 YEARS OF GROWTH
Details 2014 2015Assets-TZS'Bln' 494.03 667.10
Revenue 'Bln' 29.64 39.59
NPL 6.7% 14.7%
375 745 2,305 5,400
1 2 3 4 5 6
757
1,011 983 1,017
1,148 1,267
326.85
477.73 454.83 423.83 494.03
667.10
'
Series1
Series2
CRDB
201520142013201220112010
Commercial Banks lending to Agriculture Versus CRDB lending to Agriculture -TZS 'Billions
Tanzania
28%
32%
24% 21%19% 20%
43%47%
46%42%
43%
54%
Agric share of
wallet to total
lending
(Tanzania)
Agric share of
wallet to total
lending (CRDB
Bank)
CRDB
Countrywide
2010
2011
2012
2013 2014 2015
Agri-lending Market share to total lending (Countrywide Vs CRDB Bank perspective)
Despite the trend above, in growth of lending to agriculture by domestic commercial banks is falling, inabsolute terms when compared to other key sectors that has high contribution to GDP.
Sector March 2012 March 2013 March 2014 March 2015
Agriculture (%) 18.4 12.9 8.2 -0.9
Manufacturing (%) 11.4 18.7 12.1 21.9
Trade (%) 34.3 30.6 10.4 35.7
Person (Private) (%) 26.9 6.9 2.3 17.6
Source: Central Bank of Tanzania, 2015
Minimal competition threat given good relationship with corporate clients & experienced staff. There
are limited new entrants given risk embedded in Agriculture thus
slow growth
0.00
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
1 2 3 4 5 6 7
TZS 'Bln'
TZS 'Bln'
2009 201520112010 201420132012
254
477 454423
494
667
326
OUTSTANDING AGRICULTURE /AGRIBUSINESS PORTIFOLIO AS AT YEAR
END (TZS IN BILLIONS)
Comment: Growth in NPL in year
2015 was attributed by slowperformance in sugar, coffee andTobacco industry.
Performance indicators of Agriculture portfolio
375 745 2,305 5,400
Details 2014 2015Assets-TZS'Bln' 494.03 667.10
Revenue 'Bln' 29.64 39.59
NPL 6.7% 14.7%
CRDB group Asset Performance (Bln)
Primary Agriculture (our offerings are inputs supplies, working capital, investment facilities)
Financing:Working capital, investments, Trade finance and transactional banking.
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Corporate
Agribusiness
SME-Agribusiness
Tier -1
SME-Agribusiness
Tier-2
Micro-Enterprises & primary Cooperatives
(Food and non-food crops)
Subsistence farmers
Traditionally bankable =TZS 651.72 Billions
Traditionally unbankable
Relationship approach toAgribusiness Exporters, Importers,Agro-processors, Agri-inputs Dealers,Transporters and commercialfarmers. Includes companies &Cooperative Unions. Served fromCRDB Corporate departmentDirectorate
Relationship approach to Agribusiness Exporters, Importers , Agro-processors, Agri-inputs Dealers, Transporters and commercial farmers. Includes companies & primary cooperatives .
Served funder Retail Banking Directorate
Scheme based approach and Innovative based Banking (eg out grower schemes, and farmer groups and AMCOS. Served through CRDB Microfinance Ltd and Retail Banking.
Our approach to Coffee Industry-
CRDB Agriculture lending
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Our common Services delivery Model- CRDB Coffee Financing to Farmers/Processors/Traders)
COFFEE EXPORTBUYERS
COFFEE PRODUCERS (LOCAL BUYERS)(Cooperatives, Farmer’s groups, private individuals, estates)
Controlled Warehouse(Curing Factory)
Sale
s co
ntr
act
Loan
Agr
eem
ent
Cas
h P
aym
ent
TCB)Release order
Coffee sample
Payment to Bank A/C
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CRDB Bank Financing in Coffee SectorRegulatory and policy limitations: TCB mandates on
stock movements overrides bank's controls on both prices
and stock ownership. TCB assumes no liability for any
faulty or own negligence.
Financing purchase of unprocessed coffee: risks
related to outturn and quality management on
unprocessed coffee expose the bank to uncontrolled
losses. More risks skewed towards AMCOS
Politics: Politicization of union functions from external
& within, coupled with internal power struggles within
AMCOS. Often these are outside bank’s control
Speculation despites unfavorable International Prices:
Global price adverse movements some clients sells do not
sell coffee in times, exposing themselves and Bank to
losses. Coffee prices show consistent falling trend since
2012. Prices seems to pick-up Between Sept-Nov every
year. Over 75% of defaults comes from speculations
Continuous off-season discussions with TCB to
deliberate on risks imposed to the bank. Central
bank and ministry of Agriculture attention will be
called for.
CRDB experience in Agribusiness financing and
footprint: CRDB has long and outstanding
experience in financing agriculture sector.
Continuous review of benchmark prices with a
mark to market; introduce buyback clauses in loan
offers. CRDB microfinance & CMC can improve
checks on coffee quality. Strong KYC on
borrowers
Launched Commodity exchange: Expected to
improve market efficiency, deliver profit from
cross-sell and TPS and other non-lending profit.
Persistent challenges in coffee financing Mitigations adopted by the Bank
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Agree on way forwardLoan Processing Time Schedule 2016-17 Season
Action Time Limit/Deadline
Receiving loan applications
collecting information from
customers
From now up to 31/5/2016
Loan processing From now up to 15/6/2016
Feedback to customers From Now up to 15/06/2016
Loan documentation From Now up to 15/06/2016
Utilization of credit facilities From Now (most loans are already
approved
THE BANKS THAT LISTENS....
CRDB BANK PLC