Transcript WOMENS WORLD BANKING

INTERGRATED RISK MGT
ABDUL KYANIKA NSIBAMBI
CENTENARY BANK UGANDA
2nd April 2009
Location
Mission Statement
“To provide appropriate financial
services, especially microfinance,
to all people of Uganda,
particularly in rural areas, in a
sustainable manner and in
accordance with the law”
Centenary Bank – History
First Years ( 1982 – 1993)
1983 – Formed as a Credit Trust with the name “
Centenary Rural Development Trust”, by the
Uganda National Lay Apostolate,
1985 – Began providing financial services
1993 – Registered as a Commercial Bank with only
8 branches,
Centenary Bank Ownership
Individuals
1%
SiDi
12%
Uganda Catholic
Secretariat
31%
Catholic Diocese
38%
Stichting HIVOS
– Triodos Fonds
18%
CENTENARY BANK TO DATE
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One of the fastest growing Commercial Banks
in Uganda – over 700,000 depositors and
over 90,000 borrowers
Pioneered Microfinance in the Banking sector,
serving mainly Micro and SME’s
Actively involved in Agricultural lending, the
backbone of Uganda’s economy
Large branch network with 32 branches
networked countrywide, 52 ATMs and
employing over 1,300 staff
Centenary Bank – Branch
Network
Centenary Bank – Loan Portfolio
As at 31st December 2008
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Loan Clients 92,611
Volume is $ 144,000,000 funded by a
deposit base of $ 172,272,000
74% of the LP are micro loans, with
minimum loan amount of $ 50
NP Loans = 1.5%,
The Agricultural LP is 13% – 14% of
the Total LP,
PERFOMANCE FOR THE LAST
SEVEN YEARS
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2002
2003
Gross Loans
2004
2005
Total Income
2006
Deposits
2007
2008
Total Assets
Agricultural LP Growth.
Proposed H/q OF THE BANK
Why Agricultural Lending?
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The mission statement of the bank is to
extend financial services to rural economically
active poor,
80% of Ugandan population stay in rural
areas and main activity is Agriculture.
Uganda has conducive climate for agricultural
production and fertile soils,
The national economy is entirely dependent
on agriculture,
There is increased demand of agricultural
commodities in the region,
Agricultural Lending – History
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Started in 1998 as a pilot test targeting
small farm holder farmers
Focus was mainly on commercially
oriented farmers located in rich
agricultural regions,
Agricultural Enterprises
Financed
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Crop/animal production, processing &
marketing,
Crops financed: maize, vegetables, rice,
coffee, bananas, oilseed crops
Animal production including cattle
fattening, and dairy production, poultry,
and piggery,
Risks in Agricultural Lending
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Purely dependent on nature,
Crop and animal diseases and pests,
Market & price risks,
Poor loan management by credit officers and
institutions in the following areas;
loan evaluation,
Structuring,
Documentation,
Monitoring,
Recovery.
Risks in Agricultural Lending
Cont’d…..
Perishability of the agriculture produce,
Loan Collateral Limitations,
Poor Credit Culture in some parts of the
country,
 Lack of entrepreneur skills by farmers,
 Bad policies and Instability.
Risk Mitigation Measures by the
Bank,
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Focus on commercially oriented farmers,
Holistic approach in credit appraisal by
considering all sources of income of the
household,
Combination of securities/collateral approach,
Using well trained credit officers with a
background of agricultural academic
qualifications,
Risk Mitigation Cont’d……..
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Quick and timely loan processing
Proper structuring of loan payments
depending on the farmers cash flows,
Diversification of the agricultural
portfolio,
Using an efficient back office credit mgt
system to monitor the portfolio growth
and quality,
Risk Mitigation Cont’d……..
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Networking with other partners in the
agribusiness industry which include
farmers’ association, government,
processors, NGOs, FIs.
Increasing outreach by coming up with
new products, opening more branches
and lending offices,
Challenges of Agricultural
Lending
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Lack of credit history,
Lack of farm records,
Heterogeneity of farming,
Seasonality of agricultural production &
Loan Term Structure.
Clients are widely dispersed with
inadequate rural transportation
facilities,
Challenges ctn’d
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Poor physical and institutional
infrastructure,
Lack of production statistics from the
farmers,
End
LOVE SERVE AND UNITE
Thanks for Listening