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Agenda ~ Financing Agriculture Forum 2013

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Financing Agriculture Forum 2013: Investing in Agriculture Profitably

August 19-23, 2013 – Colombo, Sri Lanka

Monday, August 19, 2013

6:00-6:30pm

REGISTRATION

6:30-8:00pm

Welcoming Remarks and Cocktail Reception

Tuesday, August 20, 2013 – Processes: Managing Risk in Agricultural Lending

The 3 “P’s” of Success: Processes, Products & People

Day 1 Theme: Processes

The first day was dedicated to exploring the first fundamental component to successful agricultural lending:  Processes.  Presenters focused on a few critical processes guiding risk management (RM), including client selection, credit, product, and portfolio risks that are unique to agriculture. The sessions provided practical lessons that can help ensure the health and profitability of a bank’s agriculture lending portfolio.

8:00-8:30am

REGISTRATION

8:30-9:00am

 

Keynote Address:  A New Agriculture Age:  Risks and Opportunities in the Food and Beverage Business

Ross Colbert (English PDF) (French PDF)

Rabobank International, Food & Agribusiness Research & Advisory

Executive Director, Global Strategist – Food and Beverages

Mr. Colbert talked about the value proposition for banks in agriculture and address three key issues characterizing what could be called a “New Age of Agriculture”:  security of supply, price volatility, and sustainability. He explored what global food and beverage companies are doing to take advantage of the burgeoning global opportunities, while mitigating these major risks.  He also discussed how farmers, including smallholders, can participate in the New Age of Agriculture.

9:00-9:45am

Panel:   Profitable Agricultural Banking

The 3 “P’s” of Success (Processes, Products, People)

Michael Andrade, HDFC

Carlos, Budar, Agrofinanzas

Ross Colbert, Rabobank International

Florence Kariuki, Equity Bank

The Panelists discussed their respective paths to profitable agricultural lending operations in terms of the 3 “P’s”.  They discussed the challenges currently faced by their financial institutions, and considered what it will take for banks to scale up efficiently and prudently in meeting the needs of this sector.

9:45-11:15am

Using Scoring Systems to Assess Agricultural Clients

Erdal Kocoglu, Frankfurt School (English PDF) (French PDF)

Omer Demirhan, Yapi Kredi (English PDF) (French PDF)

Chandula Abeywickrama, HNB (English PDF) (French PDF)

Mr. Kocoglu of Frankfurt School introduced the ALES credit scoring tool and discussed the features and benefits of the tool.  Mr. Demirhan walked through real-life examples of how this tool is used by Yapi Kredi to facilitate loan applications and credit approvals, and ultimately to improve the bank’s operation. Mr. Abeywickrama then described the client selection and underwriting process of HNB, which carries out a more qualitative analysis of farmer clients, facilitated by HNB’s “barefoot bankers”.   

11:15-11:45am

COFFEE BREAK

11:45-1:15pm

Banking Producer Cooperatives through Risk-based Evaluations

Hans Bogaard, Rabo Development (English PDF) (French PDF)

Robert Pascal, NMB (English PDF) (French PDF)

Mr. Bogaard of Rabo Development discussed the Dutch approach to cooperative development. He explained how Rabo works to promote cooperatives in the developing world, and gave examples where this model has been successfully implemented in collaboration with commercial banks. Mr. Pascal of NMB Tanzania presented NMB’s full underwriting process when lending to producer cooperatives. Participants came away understanding the risk assessment process for this unique customer segment.

1:15-2:45pm

NETWORKING LUNCH

2:45-3:45pm

Analyzing the Credit Risk of Medium-scale Agribusiness Clients  

Miguel Gallo, FinTerra (English PDF) (French PDF)

FinTerra has built a successful business lending to fast-growing agribusinesses in Mexico. Mr. Miguel Gallo explained how FinTerra has developed policies and procedures to guide its client selection and loan underwriting for agribusiness customers. Using actual client examples, he described the due diligence process in detail, and shared the analytical tools that relationship managers use to assess client risk.

3:45-5:00pm

Principles of Portfolio Management for the Agricultural Lending Business Line

Allyn Lamb, Farm Credit East (English PDF) (French PDF)

As a capstone to Day 1, Mr. Allyn Lamb walked through the methodology used by Farm Credit East to create a risk management system.  The system considers several factors, including different commodities, loan types, loan tenors, and other characteristics that present specific risks.  He then discussed how this information is shared with the organization and used to guide operations and strategy.

6:00 – 8:00pm

 NETWORKING RECEPTION

Wednesday, August 21, 2013 – Products: Structuring Loan Products for Agriculture Clients

The 3 “P’s” of Success: Processes, Products & People

Day 2 Theme: Products

The second conference day was dedicated to our second “P” of successful agriculture lending: products. Senior agricultural bankers provided an overview of various products, talked about how they are designed and structured, and discussed the customer segments for whom they are designed.  The profitability of these products was also considered.      

8:00 - 9:30am

Seasonal Production Farm Loans: Financing the Cashflow, Not the Cow

Florence Kariuki, Equity Bank (English PDF) (French PDF)

Kashif Umar Thanvi, HBL (English PDF) (French PDF)

This session is devoted to crop production loans.  Ms. Kariuki and Mr. Thanvi shared their respective banks’ signature farmer loan products, provided an overview of key product features, described the loan cycle, and discussed their risk management practices related to these kinds of loans. They explained the types of farmers to whom their institutions lend, and shared their approaches to client/market segmentation. Reference was made to specific customers using these products, which helped to provide a more nuanced feel for the product and client segment. 

 

9:30-10:00

COFFEE BREAK

10:00- 11:30am

Financing Equipment for Farmers and Agricultural SMEs

Hans Balymujura, ABSA (English PDF) (French PDF)

Arvind Sonmale, SAFL (English PDF) (Supplemental - English PDF)

Long-term investment financing was the focus of this session, which included representatives of a commercial bank and a finance company, respectively.  Mr. Balymujura described the various kinds of fixed assets that ABSA finances and explained how they designed, promoted, originated, underwrote, and monitored these loan products. Mr. Sonmale represents an agricultural finance company that made its start in financing irrigation systems—which is still its main line of business.  He explained the underwriting and structuring of loans for irrigation systems and talked about the many special considerations around this kind of fixed asset. 

 

11:30-11:45

COFFEE BREAK

11:30 – 12:30pm

 

Leasing: An Option to Traditional Investment Lending

Ramesh Iyer, Mahindra (English PDF) (French PDF)

This presentation focused on the leasing operations of Mahindra & Mahindra. The speaker  walked the participants through examples of actual leasing deals and discussed all of the steps in the leasing process, from promotion and origination to approval and post-approval monitoring.  In addition, the presenter discussed NPLs and how M&M dealt with troubled assets, and talked about the profitability of their operations.

12:30 – 2:00pm

NETWORKING LUNCH

2:00-3:00pm

Rolling Out Warehouse Receipts Financing:  Pioneering a New Product  

Sebastien Lahaie, Sudameris (English PDF) (French PDF)

Mr. Lahaie, CEO of Sudameris, provided a detailed description of the warehouse receipt (WHR) system in Paraguay, including its legal structure, the main actors involved in the system, and the types of commodities covered by the system.  He then discussed Sudameris’s WHR financing product, walked through the warehouse receipts product cycle, and described the customers and commodities financed by Sudameris. 

3:00 - 4:30pm

Banks Make Supply Chain Financing Work: A Tale of Two Models

Michael Andrade, HDFC (English PDF) (French PDF)

Carlos Budar, Agrofinanzas (English PDF) (French PDF)

India’s HDFC and Agrofinanzas of Mexico are financial institutions keen on promoting agricultural supply chain financing.  The presenters introduced specific cases from their respective customer files. Their presentations also considered: the roles and responsibility of the bank, the large company (e.g., dairy company, large agro-processor), and their small suppliers; specific policies and procedures governing these supply chain financing arrangements (related to origination, structuring, relationship management, loan, and repayment dynamics); and ICT requirements that enable these kinds of financings.

5:30 – 7:30pm

 

NETWORKING COCKTAIL RECEPTION 



Thursday, August 22, 2013 – Structuring Agriculture Lending Operations

The 3 “P’s” of Success: Processes, Products & People

                                       Day 3 Theme: People

People are your most important assets. The sessions for Day 3 were dedicated to learning how agricultural lenders get the best people, develop their skills and capacities, and build cohesive, high-performing teams focused on farmers and agribusiness clients.

9:00-11:00am

PANEL:  Beyond the Org Chart:  Optimizing Your Agribusiness Unit’s Design, Crafting Staff Profiles, and Recruiting the Talent You Need (Watch Panel Videos)

Hans Balymujura, ABSA

Omer Demirhan, Yapi Kredi

Kashif Umar Thanvi, HBL

Michael Andrade, HDFC

Matt Troniak, East Africa Agriculture Finance Network

A group of senior bankers took turns sharing the experiences of their institutions in positioning the agricultural lending business within the organization, determining staff roles and responsibilities, and developing recruitment strategies.  The moderater guided the discussion towards key lessons learned in each of these thematic areas.

11:00 –11:30am

COFFEE BREAK

11:00 – 1:00pm

 

PANEL:  Building High-Performing Teams:  Effective Training, Meaningful Career Development, Practical Staff Retention

Nathen Franzen, First Dakota Bank

Chandula Abeywickrama, HNB

Matt Troniak, East Africa Agriculture Finance Network

Carlos Budar, Agrofinanzas

Allyn Lamb, Farm Credit East

This panel considered strategies for building staff capacities, providing avenues for advancement within the institution, and keeping good staff from leaving the institution. After these introductory remarks, the moderator drew out some of the key lessons from panelists, facilitated discussion among them, and took questions from the audience.

1:00  – 2:30pm

NETWORKING LUNCH

2:30 – 5:30pm

 

Explore Colombo: Tour of Local Attractions (Optional)

 

6:00 – 8:30pm

 

FORUM CLOSING & CELEBRATORY DINNER

Friday, August 23,2013 – Field Visits to highlight the “3Ps of Success” - processes, products, and people of Hatton National Bank

8:00 – 10:00am

Departure from hotel

10:00 – 1:00pm

Tour & Discussion

1:00 – 2:00pm

Lunch

2:00 – 4:30pm

Visit

5:00pm

Arrival back at hotel