Project detail - First City Monument Bank Limited - Nasira Portfolio

Who is our customer

First City Monument Bank Ltd. (‘FCMB’) is a wholesale banking group with a growing small and medium-sized enterprise (SME) banking business. FCMB was established in 1982 and is headquartered in Lagos, Nigeria. FCMB emerged as a top-10 bank in February 2012 following the takeover of FinBank. FCMB has been listed on the Nigerian Stock Exchange since 2004 and is continuously growing with about 4,000 employees, 250 branches and cash centers, and a subsidiary in the United Kingdom (FCMB Ltd. UK).

What is our funding objective?

FMO is providing a NASIRA guarantee (USD 25 mln) with existing client First City Monument Bank in Nigeria. This will allow the bank to expand its funding to agricultural, youth, and women-owned SMEs without requiring collateral. The NASIRA guarantee will support FCMB to further grow its business towards the so-called underserved SMEs. Partial RI label is applicable, under Inclusive Business (finance to underserved SMEs). The transaction has been further enhanced by a technical assistance (TA) funding program. Through this TA initiative, FCMB and FMO have partnered to incubate 15 scalable early-stage agri-tech businesses in Nigeria.

Why do we fund this investment?

FMO contends that this financing will generate strong impact on economic development in Nigeria. FMO’s Financial Institutions Africa department has a clear ambition to strengthen the relationship with FCMB. This is because of the firm’s focus on SMEs, which is the backbone of the Nigerian economy and an important means for economic development and employment. Job creation in Nigeria, which has the largest population in Africa of 220 million, is critical. The country is experiencing severe economic challenges, including high unemployment and a significant 70% depreciation of its currency over the past year. The investment is currently undergoing approval of the envisaged 50% Reducing Inequalities label.

What is the Environmental and Social categorization rationale?

FCMB is an E&S Category A bank due to the high E&S risk portfolio, both in terms of sector exposure and a large portfolio of project finance activities. Many of the large corporate exposures are companies operating in the energy, manufacturing, and real estate sector. Typically, E&S risks of projects in these sectors that need to be taken into account are community grievances, land and natural resource conflicts, resource use, use of hazardous materials, pollution related aspects, harsh labour conditions, occupational health and safety issues, habitat fragmentation, biodiversity impacts, use of security forces, resettlement, etc. FMO has agreed an environmental and social action plan with FCMB, with the main aim to increase internal E&S capacity and enhancing the bank’s E&S risk management framework with consultancy support.

More investments

Date	Total FMO financing
6/19/2024	NGN 1113.62 MLN
6/3/2024	USD 0.06 MLN