“our success story in agribusiness financing...

12
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 ”

Upload: phungtuyen

Post on 05-Feb-2018

220 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

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 ”

Page 2: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

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

Page 3: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

-

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

Page 4: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

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

Page 5: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

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

Page 6: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

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)

Page 7: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

Primary Agriculture (our offerings are inputs supplies, working capital, investment facilities)

Financing:Working capital, investments, Trade finance and transactional banking.

Page 8: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

8

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

Page 9: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

9

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

Page 10: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

10

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

Page 11: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

11

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

Page 12: “Our Success Story in Agribusiness Financing ”coffeeboard.or.tz/News_publications/2016-2017/ncc2016/PRESENTATI… · “Our Success Story in Agribusiness ... SME-Agribusiness

THE BANKS THAT LISTENS....

CRDB BANK PLC