Project detail - First City Monument Bank Limited - Nasira Portfolio

Who is our customer

First City Monument Bank Limited (‘FCMB’ or ‘the Bank’) (Fitch: B-, Moody's: Caa1) is a Tier II commercial bank with headquarters in Lagos, Nigeria. It was founded in 1977 as a brokerage company before gaining a banking license in 1983. FCMB is the primary subsidiary (93.7% of TA as of Q3 2022) of the FCMB Group Plc (the “Group”), a full-service banking group listed on the Nigerian Stock Exchange. The bank provides a wide range of banking and financial services via its six main business segments: Personal, Institutional, SME, Commercial, Corporate, and Treasury & Financial Markets. The Bank is transitioning from a corporate bank into a universal bank including expansion into the the SME and retail segments. Its 2021-2025 strategy seeks to intensify the acquisition and retention of active customers (i.e. from 7.6m to 25m customers). FCMB has been a client of FMO since 2014 when FMO arranged a six-year USD 60m syndicated facility. In 2019 FMO arranged a USD 50m subordinated debt facility. Currently, FCMB is in the process of obtaining a USD 60m syndicated senior facility, of which FMO provides up to USD 20m; EFP up to USD 30m and USD 10m to be provided by FIM funds. In addition, a USD 25m NASIRA facility is being offered to FCMB to support entering into the underserved SME segments including women-owned and rural MSMEs.

What is our funding objective?

The objective is to support the 2024 edition of FCMB’s AgriTech Venture Building Program. It is a full-fledged incubation program for idea-stage agri-companies run by FCMB. Through the program, FCMB will identify scalable and impact-driven early-stage companies and provide them with access to knowledge, skills, funding, and networks, to take their ideas to the next level.

Why do we fund this investment?

According to McKinsey & Company, more than 60% of the population In Subsaharan Africa consists of smallholder farmers and about 23% of Subsaharan Africa’s GDP comes from agriculture. However, it is estimated that the agricultural potential of the region remains untapped. The production of grains and cereals has a tremendous upside potential (two or three times), which could add 20% to the global economy. Substantial investment is needed to allow Africa's agritech sector to fully utilize its capabilities. With an estimated worth of USD 1 trillion by 2030, Africa is positioned to emerge as the leading global hub for agricultural technology (Agtech) solutions. The purpose of this initiative is to foster and accelerate the growth of scalable agri MSMEs, which is a core NASIRA target group. By supporting early-stage Agtech companies to scale up, we will contribute to increasing agricultural productivity and, indirectly, to food security and SDG 2 (zero Hunger), SDG 8 (Decent work and economic growth), and SDG 10 (Reduced inequalities). The execution of this project is not only strategic from a social impact perspective, but also from a commercial point of view. FCMB has to accelerate the onboarding of MSME companies to further expand the portfolio covered by the NASIRA RSF. Through this TA initiative, FCMB and FMO have partnered to incubate 15 scalable early-stage agri-tech businesses in Nigeria. A hackathon will precede this incubation trajectory to identify disruptive business models that address pressing problems in the agricultural sector.