AATIF provides a senior loan of USD 15m to Sterling Bank plc (“Sterling Bank”), a forerunner in agricultural financing in Nigeria
On February 28th 2019, AATIF disbursed a USD 15m facility to Sterling Bank to grow its agricultural lending portfolio.
Sterling Bank is a listed Nigerian mid-sized commercial and retail bank originally established in 1960 and licensed in 1969 as Nigeria’s first merchant bank. The bank has grown to a network of 185 branches, > 3,000 cash centers, 3,000 employees, and 1.4 million customers. The bank offers retail banking (current, savings and fixed deposit accounts as well as e-banking services,) corporate and investment banking and commercial and institutional banking (trade financing and payment solutions.) The bank recently embarked on business transformation initiatives (digital & non-digital) and is committed to grow its agricultural investments.
The USD 15m loan shall be applied towards growing the bank’s agricultural loan portfolio. Sterling Bank entered the financing of agricultural value chains in 2010/2011 and was the first commercial bank to participate in major financing initiatives sponsored by the Central Bank of Nigeria to promote lending to the agricultural sector and smallholder farmers in various Nigerian states. Agriculture currently accounts for 3% of the bank’s loan portfolio and Sterling Bank hopes to double that in the short term. The largest client segments are mid to large scale agricultural enterprises and input providers as well as state governments who on-lend to farmer co-operatives. The bank aims to increase lending to the smallholder sector.
Dr. Thomas Duve, chairman of the board of directors of AATIF said that “We are proud to be investing in a bank that has strong ambitions to grow its agricultural lending portfolio in the short-term. Furthermore we strongly support the banks ambitions to promote digital solutions and engage in a broader stakeholder dialogue on how to tackle access to finance as they have started on the recent Agriculture Summit Africa in Abuja.”
The Africa Agriculture and Trade Investment Fund (AATIF)
AATIF is a public private partnership dedicated to promote the food / agri sector across Africa by providing patient capital and technical assistance. The fund provides debt financing to small, medium and large-scale agribusinesses along the entire agriculture value chain as well as financial institutions active in the sector. Ticket sizes range from USD 3.5m up to USD 30m per project with a possible maximum tenor of 12 years.