Wholesale Banking Products
for
SMEs
www.firstbanknigeria.com
0
Outline
• Advance Payment Guarantee (APG)
Bonds &
Guarantees
• Bonds & Guarantee (B&Gs)
•Telecoms Distributorship Finance
•KDF for Fast Moving Consumer Goods (FMCG)
Key
Distributorship
Finance (KDFs)
•KDF For Petroleum Marketers
•Cement Distributorship Finance
• Invoice Discounting Facility (IDF )
Others
• Trade
BONDS & GUARANTEES
Advance Payment Guarantees
(APG)
Bonds & Guarantees (B&Gs)
Product Definition
Product Definition
To mitigate performance risk challenges.
B&Gs are instruments issued by the bank
APGs are demanded by Principals from
guaranteeing
contractors. The sum paid is a percentage
default or insolvency of the contractor up
of the contract value.
to the limit of the bond.
beneficiary
against
the
They could be: Cash and Non-Cash
backed.
Key Features
• 1% guarantee fee for all
APG transactions
• Maximum tenor is in line
with the underlying
beneficiary’s request,
subject to a maximum of
18 months
Benefits
• Initial Disbursement is
clean i.e. without
collateral
• Quick Turnaround Time
• Adherence to new CBN
pricing tariff
Features
Key Key
Features
Benefits to SMEs
• Transaction must be fully
disclosed and legitimate in
line with the laws of the
Federal Republic of Nigeria
• Multiple variants to
accommodate
flexibility e.g. Bid
&Tender, Performance
Bond,, Excise & Duty
Bond etc.
• Maximum tenor is in line
with the underlying
beneficiary’s request,
subject to a maximum of 12
months
• Quick Turnaround
Time
• Minimal fees which can
be negotiated2
Key Distributorship Finance (KDFs)
Petroleum
Dealership
Finance
KD for FMCG
Telecoms
Distributorship
Finance
Cement
Distributorship
Finance
Product Definition
Product Definition
Product Definition
To provide finance for purchase
To finance Telecom Distributors
of products by Key Distributors
to meet their credit needs toward
of
the distribution of goods
Fast Moving Consumer Goods
(excluding CDMA handsets).
To provide flexible short-term
facility to meet working capital
requirements in the distribution
of cement from approved
manufacturers.
Product Definition
(FMCG) who are in the Bank’s
To finance stock of white
petroleum products (PMS, AGO
& DPK) for Dealers who are
registered IPMAN or Dealers of
major Oil Marketers.
approved list.
Key Features
• Availed either as an Overdraft, Bank Guarantee
or a combination of both
• Facility Tenor could be as long as 12 months
with:
• 90 days transaction cycle for FMCG &
Cement
• 30 days transaction Cycle for KD
Petroleum
• 7 days for Telecoms
Benefits
• Enables SMEs buy products on cash & carry
basis
• Flexible collateral structure
• Competitive pricing
• Higher volumes of transaction which leads to
higher margin (income)
3
OTHER SME PRODUCTS
Invoice Discounting Finance
Trade
Product Definition
Product Definition
• International trade is the exchange of
• A self-liquidating facility to provide
goods and services between countries with
immediate funding to customers of the
bank
awaiting
payments
contract of sale and trade settlement. A
for
product that is sold to the global market
goods/services rendered to reputable
is export, and a product that is bought from
companies in the banks approved list.
Key Features
• Maximum tenor of 60 days
with 30 days option to
rollover
• Age of Invoice to be
discounted is 45 days
• Invoices of executed jobs
must be from a Principal
acceptable to the Bank
Benefits
• SMEs can meet urgent need
for working capital while
awaiting payment for jobs
executed
the global market is import .
Features
Key Key
Features
•
•
•
• Up to 70% of Invoice can be
financed
• Quick access of facility
amount
• Competitive pricing
•
All Visible Trade transactions are
processed via a Form M
Parties to the establishment of an LC
are Issuing Bank, Applicant,
Beneficiary, & Advising Bank
Bills for Collection can either be:
Documentary Collection; i.e. collection
of commercial & financial documents,
Clean Collection; i.e. collection of
financial documents only
Invisible transactions are processed
via Form A.
Benefits to SMEs
• Funding made
available to SMEs for
the importation and
exportation of various
products
• Flexible collateral
structure
• Competitive pricing
4
Q&A
5
Thank you
February 2014
www.firstbanknigeria.com
6