BASIC INFORMATION Name of business SEEDVEST MICROFINANCE BANK LIMITED Physical Address 1. Corporate Head Office - 15, Obafemi Awolowo Way, J. Allen, Dugbe, Ibadan. 2. Samonda Branch - 50, Sango-University of Ibadan Road, Samonda, Ibadan. 3. Gbagi Branch - Opposite Intercontinental Bank Plc, New Gbagi Market, Old Ife Road, Ibadan. 4. Iwo Road Branch - 84, Ile Pupa Bus Stop, Opposite Olowo ti fowo sanu, Iwo Road, Ibadan. 5. Bodija Branch - 3, Akilapa Street, Beside Akilapa Mosque, Opposite Ram Market, Bodija-Oja, Ibadan. 6. Gate Branch - Hamidu Ajibade Shopping Complex,

Agodi-Gate

7. Challenge Branch - 14, Ring Road, Beside First Bank Plc, Elewura Junction, Challenge, Ibadan. 8. Agbeni Meeting Point - SW4/27, Agbeni Ologede, Ibadan. Postal Address P.M.B. 5083, General Post Office, Dugbe, Ibadan Contact Persons: Mr. Kehinde Oyeleke (Managing Director) 08034552355 Mr. Niyi Akinbode (General Manager) 08035134118 Mr. Simon Eromosele (Legal & Compliance Officer) 08032672020 e-mail Kehinde.oyeleke@seedvestgroup.com

Website www.seedvestgroup.com

1. Business Description

1.1 Brief Overview

1.1.1 History

Seedvest Microfinance Bank commenced business on 4th June, 2007 pursuant to a unit microfinance bank license issued by the Central Bank of Nigeria. In establishing the Bank, the promoters were driven by the need to increase value creation in the society through the empowerment of poor and underprivileged people. They believed that entrepreneurship is the major creator of wealth in every society and that the existing banking system was not structured to support entrepreneurs and small businesses. The Bank, the first microfinance bank to be licensed in Oyo State, is the leading microfinance bank in Oyo State, with its operational base in Ibadan.

1.1.2 Main Business Activity

Seedvest Microfinance Bank provides financing and savings services to individuals, groups, associations and corporations.

1.1.3 Goals

The goal is to be the best Microfinance bank in Nigeria and one of the country’s best financial institutions in Nigeria in the next five years.

1.2 Service Description

Seedvest offers a range of banking services to its customers. They can be classified into deposit mobilization, granting of loans and advances; and advisory services.

1.2.1 Deposit Mobilization

Deposit mobilization enables the customers to save for business needs and asset acquisition. We have different types of accounts with opening deposits considerably lower than commercial banks’, so as to make the services available to all classes of customers. Savings and Fixed deposit accounts are also maintained for customers.

Types of account maintained include: Mustard Seed, Seed Investment, Dynamic and Seed Enlargement savings accounts.

Opening deposit varies between N1, 000.00 for Mustard Seed and N10, 000.00 for Seed Enlargement. Fixed deposits are maintained at minimum of N50, 000.00 for a tenor of 90 days to 360 days. Total deposits stand at N82.5million as at 22nd March, 2010.

Total number of deposit customers as at end of March 2010 is 29,512.

1.2.2 Product Development:

New savings products have been introduced to increase the bank’s appeal to the public and align our services better with the customers’ needs. These are:

Seedvest Children Future Assured Account, to be operated by parents, with a tenor of twelve months before withdrawal and with benefits such as: student scholarship and future employment opportunities.

Seedvest Workers Advancement Account, for salary earners with the benefit of access to cash advances against monthly salary.

Seed Treasure Account, for traders and suppliers with access to bank overdraft.

Seed Young Star Account, to be opened in the name of the child and operated by a parent until the child becomes 18 years old with the benefits of Seedvest customized school gift items for the child.

1.2.3 Loans and Advances

Since inception, the Bank has granted a total of 23,244 loans, amounting to N1.74billion. Current loan portfolio is about N300million.

1.2.4 Business Advisory

Seedvest’s customers are mainly lower class, with minimal formal education, especially in business management and keeping of financial records. Therefore, Seedvest generally advises and educates its customers on business management, simple book-keeping, cultivation of banking habit and control of cash flow.

1.3 Location

1.3.1 Characteristics of the Chosen Market

Seedvest Microfinance Bank is located in Ibadan, one of the largest cities in Nigeria, with an estimated population of 6 million people. It is the third single largest city in Africa, behind Cairo and the increasingly defragmented Lagos. It is also the home to 6 major markets, and is adjoined by dozens of other smaller markets. Major markets in Ibadan include the upscale Dugbe market (where electronics, books and home appliances are sold), Bodija, Oja-Oba and Aleshinloye (which are three large food markets), the Agodi-Gate market (where everything ranging from auto spare parts to electronics are sold) and the New Gbagi market (for clothes). Ibadan is also one of the major metropolises in Nigeria, and the purchasing power of the residents is second only to that of people living in Lagos, Port Harcourt and arguably Abuja. It is in essence a very large and growing market. The main occupations of people living in Ibadan include trading, manufacturing and artisanship. White collar jobs are few and far between, although the government is the biggest employer of labour here. Many people also work as factory helps and manual labourers. It is a skewed society, in which less than 1% of the residents could be considered rich. Majority lives at the very subsistence level. Ibadan is part of Oyo State, a State bounded on the North by Kwara State, on the South by Ogun State, on the East by Osun State. Most of Oyo State is rural; hence majority of the residents, especially those that live in the rural areas are farmers. Financial services in Oyo State are not as deep as that of Lagos. Only a handful of banks (notably First Bank, Union Bank and UBA) were in Ibadan some 10 years ago. Things have recently gotten better and many of the newer banks have either opened branches in the city or are in the process of doing so. Despite this, financial services are still largely inadequate in this city, and have not gone beyond routine banking services. More than 80% of the residents do not operate any bank accounts and are therefore shut out of the current financial system. The situation is even worse in other cities in Oyo State, where most of the residents do not have any bank at all, and therefore do not have access to savings or credit facilities. The impact of this unavailability of credit on the life of people is palpable. Most remain mired in subsistence living, consuming excess harvest in the good years, only to suffer severe deprivation during the lean years. As a result of this, most people in Oyo State have been unable to rise out of poverty, cannot afford basic amenities of life, cannot secure critical

finance for their businesses and have no savings for the future. These people desperately need microfinance services.

It is clear that the residents of Oyo State need savings and credit services, which existing commercial banks have so far been unable to provide. It is considered unlikely that major commercial banks would develop the kind of orientation needed to service the poor grassroots people of Oyo State. It is therefore left to microfinance institutions like Seedvest to step in and provide these services, so that the quality of life of residents can improve. Seedvest’s promoters are fully prepared for the challenges of touching lives in Oyo State through such microfinance activities like savings mobilisation and grant of credits.

1.4 Ownership Structure

Seedvest MFB Shareholding Details As at December 2008

2008 % Today % Location Role/Responsibility

Cash Contribution

Otunba Olusola Adekanola

40,000 20 60,000 20 Lagos Chairman 60,000

Mr Kehinde Oyeleke

40,000 20 60,000 20 Lagos MD 60,000

Pastor A.O.R Oladele

11,000 6 11,000 4 Lagos Shareholder 11,000

Frame Investment Ltd

4,500 2 4,500 2 Lagos Shareholder 4,500

Chief Olabisi Ogunjobi

- 0 - 0 Lagos Director 1,000

Mr Abiodun Adeoti

5,000 3 5,000 2 California USA

Shareholder 5,000

Miss B.A Mustapha

5,000 3 - 0 Port Harcourt

Shareholder -

Seedvest Ltd

94,500 47 158,000

53 Lagos Shareholder 158,000

Total 200,000

100

300,000

100

300,000

All of the company’s shareholders have made cash contribution for the shares. There is currently no proposed change to the company’s ownership. The relationship between the shareholders is guided by the company’s Memorandum & Articles of Incorporation (“MEMART”), and there is no separate shareholders’ agreement. We would be delighted to furnish you with a copy of the MEMART. Ownership overlaps significantly with management. The management group owns ~93% of the company (87% as at December 2008).

1.5 LEGAL CONSIDERATIONS

NAME DESCRIPTION REQUIREMENTS TO OBTAIN/MAINTAIN

DATE OF ISSUE

RENEWAL DATE

COMPANY REGISTRATION

Certificate of incorporation (issued by the corporate affairs commission)

Memorandum and articles of associationList and particulars of shareholders and shareholdingsList and particulars of directorsLegal practitioner’s statutory declaration of complianceAnnual returns (to be filed with the audited statement of account) yearly at the corporate affairs commissionSection 636 bi-annual filings (February and August)

9th May 2007

TRADING LICENCE

Operating Permit and Licences

Microfinance banking final operating licence (issued by the CBN)

Monthly, quarterly and yearly rendition of returns to the central bank of NigeriaApproval for the appointment of new directors and management staffApproval for the increase in share capitalApproval for the opening, relocation and closing of branches or cash centresMonthly rendition of report on money laundering to the Economic and Financial Crimes Commission (EFCC)

25th June 2007

2 Opportunity

2.1 Market Overview

The current microfinance banking regime is the latest in the efforts to address poverty and improve the quality of life for the poor in Nigeria. Past efforts include People’s Bank, Better Life for Rural Women and the National Poverty Eradication Programme. These programmes have invariably failed to address the widespread issue of poverty in Nigeria, and microfinance banking is being looked upon to fill the gap left by all these failed intervention programmes. The introduction of microfinance banking led to the licensing of about 300 new players throughout the country. This is in addition to about 600 existing community banks that were all grandfathered into microfinance banks. Beyond licensing these banks, the CBN as the regulatory body has done very little to nurture the nascent industry. The result is that many of the grandfathered community banks, most of them with grossly inadequate capital bases, have closed shop. The unwieldy number of approved microfinance banks has severely tasked the regulatory capacity of the CBN, with the result that many operators have taken on huge financial risks and some have collapsed totally, often with the depositors’ funds. Expectedly, the entire sector now faces negative publicity as a result of the failure of these poorly monitored microfinance banks. Our experience is that the market for microfinance is huge, given that most poor and middle class people are locked out of the existing banking system. Ongoing banking sector issues have further affected the ability of the banks to extend credit, implying large business opportunities for well organised and adequately funded microfinance banks.

Seedvest MFB is the dominant microfinance bank in Oyo State, and there is practically no meaningful competition from other MFBs. It has also structured itself for maximum efficiency of operations and for profitability. Accessing funding for onlending is the Bank’s current main challenge.

2.2 Customer Segmentation

Product % of Sales

1 Traders Relief Scheme/Transport Support Scheme

32%

2 Loans 41%

3 Group Loans 22%

4 Daily Contributions Accounts 5%

Total 100%

Loans:- This is a personal loan taken for business or personal use with monthly repayment period. Loans could be to individual borrowers or to recognized associations and groups.

Traders Relief Scheme (TRS):- Loans for traders, repayable on weekly basis.

Transport Support Scheme (TSS):- Loans for those in transport business either for repair or purchase of vehicle.

Daily Contribution Account (DCA):- This is meant for daily sales traders with monthly revolving tenor.

2.3 Industry & Competition Analysis

In theory, the commercial banks should be the biggest financiers of consumer and entrepreneur financing in Nigeria. For one thing, they make up more than 85% of the Nigerian financial services sector. In addition, the kind of branch networks that commercial banks have makes them best placed to serve retail consumers and entrepreneurs. In reality, however, commercial banks in Nigeria have not found microfinance attractive compared to other areas of banking. The administrative requirement for microfinance is beyond the competence of most banks. The inability of commercial banks to operate at the microfinance level is however not a Nigerian phenomenon: commercial banks all over the world have tended to focus on bigger ticket items rather than multiple loans in the amount of N50,000. Notwithstanding the foregoing, many banks are seriously contemplating setting up microfinance subsidiaries that would leverage their branch network and other resources. How this will be done without eroding the brand equity of the overall commercial bank remains to be seen. At a much lower level, community banks had traditionally focused on micro enterprises and small entrepreneurs. The historically poor capitalisation of the community banks and their typically poor management quality has however hindered them from being effective in the finance of small businesses and entrepreneurs. While the CBN has grandfathered some 600 of the previous community banks into microfinance banks, most of them are not likely to be effective players in the emerging competitive landscape.

Leasing companies have also been involved in financing micro enterprises. These leasing companies have been limited to few urban areas like Lagos and Port Harcourt, and have traditionally focused on big corporations. There have not been many testimonies on the effectiveness of the leasing companies in providing micro credit to small enterprises.

Some NGOs have focused on providing micro enterprises with short term financing. Some of these NGOs have been in the form of credit cooperatives and have targeted farmers and artisans in few rural areas. Because many of these NGOs operate as grant giving agencies, they do not have the kind of capital retention needed to grow a vibrant microfinance system. While NGO microfinance institutions will continue to play very important roles in funding small business, their grant-giving orientation is expected to significantly circumscribe their capital as well as their overall effectiveness within the system.

Lastly, a lot of international microfinance organisations have shown interest in Nigeria, attracted by the size of the country’s population, and the relative underdeveloped nature of the microfinance business in Nigeria. These players are expected to be dominant in the evolving dispensation, although their orientation seems to be more in terms of creaming the top by focusing on few urban centres rather than genuinely providing micro credit to needy businesses in the rural communities. The stipulation by the CBN that every licensed microfinance bank must operate grow organically from a chosen state has somehow whittled down the expected dominant influence of these organisations.

2.3.1 Licensed Microfinance Banks

Since the CBN commenced the licensing of Microfinance Banks in 2006, some 300 new MFBs have been licensed to operate, in addition to the 600 former community banks that have now been grandfathered en masse into the rank of microfinance banks. About a third of these newly licensed microfinance banks are in the Lagos area, there is yet to be any direct

competition among them, given the inadequacy of supply of microfinance services relative to demand. In any case, a handful of these players are already differentiating themselves from the pack, and this distinction is likely to accentuate over time, given the fact that the low entry barrier has created room for all kinds of players, many of which are grossly ill-equipped to compete in the emerging sector. Seedvest was the first licensed MFB in Oyo State, and remains the only established player in the State. It is the Bank’s plan to leverage this position to advantage by developing products and services tailored to meet the need of its customers. The plan is to cover the market so aggressively that an automatic entry barrier would be erected against any would be entrant into the microfinance sphere in Oyo State.

2.4 Competitive Advantage

2.4.1 Strengths

Seedvest has acquired market acceptance and industry leadership in a market that remains largely underserved;

Demand in the market is still unmet, hence there is still a long way for the business to grow;

Good market image has enabled the Group to attract experienced top quality professionals;

Management is seasoned, with deep financial services expertise, and good contacts within the local financial services environment;

Team has worked together over the years, and understand the business landscape very well

Business is deemed very scalable, with many potential growth areas still largely unexplored.

2.4.2 Weaknesses

The microfinance culture is still underdeveloped in Nigeria. Lots of education would be needed to enable microcredit consumers develop credit management techniques;

Widespread poverty may exacerbate default risks; Infrastructural inadequacies would increase the cost of providing service in the rural

areas; Personnel shortage could limit the Bank’s growth and expansion strategy.

2.4.3 Opportunities

Big commercial banks are not equipped to provide microfinance services in the rural areas. This provides significant growth opportunities for focused microfinance banks;

Weak capital base of previous community banks makes them acquisition candidates for well organised and capitalised microfinance banks, therefore providing additional growth avenue;

The entry thresholds of N20million and N1billion for the 2 categories of microfinance banks as well as the requirement that each Microfinance Bank choose a state to operate from will minimise the instance of cherry picking by big institutions and enable smaller microfinance banks to thrive.

2.4.4 Threats

Policy reversal by the Federal Government on microfinance may adversely affect the business. This is however considered unlikely given the expected role of microfinance institutions and the extent of need for microcredit;

Entrance by the big commercial banks into the microfinance niche may reduce the space needed for true microfinance banks to grow. Major commercial banks do not, however, have the infrastructure to effectively provide microfinance services. Also, a foray by these banks into microfinance would most likely erode their brand equity; hence such foray is not expected.

2.4.5 Summary

The overall summary of the above factors is that Seedvest has all it takes to succeed in the emerging microfinance market. The experience and passion of the management team would combine with the global sentiment to provide credit to poor and aspiring entrepreneurs as well as the willingness of the Nigerian government to support the establishment of a strong microfinance system to make Seedvest a success

3 Marketing

3.1 Costing & Pricing

The Bank today is substantially funded by the shareholders’ funds. Only N82.5million of the Bank’s approximately N450million capital is through the depositors’ fund. It is therefore difficult to attach any cost to its loan product, as a practical matter. Rates on deposits vary based on amount of deposits and its duration. The lowest rate is 5% per annum (for savings accounts), while deposits range from 6% to 13% per annum, depending on amount and tenure. We would estimate our total imputed costs of capital to be about 22% per annum. Our loans attract monthly interest charges as well as a one-time administration fee per transaction. The following table shows the rates for our various products:

Product Monthly Interest Rate Admin Fee (per transaction)

Loans 7% 5%

TRS 6% 5%

LPO 7% 5%

DCA 6% 5%

You should however note that our customers are stratified based on their performance and length of relationship. Customers who have taken three transactions without any performance default are promoted to Gold Status (which attracts a 3% admin fee), while those with six clean transactions are promoted to Platinum Status (with a 1% admin fee).

3.2 Sales Projections:

Projected monthly loan and advances in 2010 is N136million, which we consider realistic, subject to funding. We in fact face a huge unmet demand from old and new customers and therefore believe this target could be surpassed. Increase in income on the short term (say within the next one year) will results from the current increase in credit demand, but in long term expansion of branch network will boost income and profitability.

3.3 Marketing Plan:

3.3.1 Marketing Strategy

The Marketing Strategy being used is as follows:

a. Identification of customers banking needs, some customers want to maintain savings accounts where they can save money for future use. Some require business advice, while some want loans to support their business equity capital.

b. Segmentation of the market which involves subdividing it into subsets for target marketing.

c. Penetration of the subset market which means convincing customers to buy particular services that give a good share of the market to our bank.

d. Customer performance is being encouraged through the promotion of performing customers into Gold and Platinum Statuses. This not only encourage good credit behaviour on the part of the customers, it also breeds strong loyalty to the Bank.

Already many deposit and lending products which constitute the needs of the customers have been identified as explained under service description.

3.3.2 Marketing Method:

Although we had in the past relied on such marketing methods like erection of billboards, and radio and television adverts, our marketing approach in the past year has focused more on creating a good image and encouraging our customers to testify of our services by word of mouth. Our extensive branch network in Ibadan means that we are within the reach of most customers, thereby avoiding the need for them to travel long distance and incur huge costs just to transact with us. Our focus going forward will be on improving our operating efficiencies and improving the customers’ experience, rather than through artificial methods like adverts, which we believe does not ultimately create long term relationships.

One thing we have done well in the past is to period have interactive sessions with our customers through occasional Customer Forums. These forums have improved the perception of the customers of our Bank as a very responsive institution. They have also flagged behaviours that customers are unhappy with, and have in some cases led to the introduction of new products and services, and in one case, a new branch.

4 Operations

4.1 Key Operational Functions

4.1.1 Customer Relations Department Open Account For all Customers Keeps Customers Profile and Mandate Files

4.1.2 Credit & Marketing Department

Initiates credit request from customers Process customer's application and packages loan files Reviews customer files in line with documentation check list Appraise files for completeness and viability in line with credit policy

4.1.3 Inspection Dept Verifies location information supplied by customers Ascertain the existence, ownership and value of assets pledged as security Prepare inspection report and file in customer's file

4.1.4 Credit Admin Dept Reviews files for completeness Forward files to & receive files from Legal unit Re-appraise customers request for viability Prepare customers files for credit committee Convene credit committee meetings

4.1.5 Legal & Compliance Reviews collateral documentation for completeness and ensure that the bank exposure

is adequately covered Process all perfection needed for various security types Has custody of all collateral documents as well as Guarantors' cheques 4.1.6 Credit Committee Deliberates on all loan requests Reviews the file to ascertain whether or not, all identified risks have been mitigated. Gives approval for such loan requests after satisfying itself that the Bank funds are

adequately secured

4.1.7 Credit Administration Department Prepare offer letters for all approved loans Send offer letters to finance for disbursement Forward security documents to legal dept for keep Keep custody of all approved files

4.1.8 Finance Department Receives approved offer letters from credit Admin.dept. Disburses into customers account to allow withdrawals prepares schedules of expected repayment for the credit officers

4.1.9 Cash Department

Pays cash to customers upon withdrawal request made on approved loans Post withdrawal instruments into the customer’s account to update the account status Take deposit and repayment made into various customers’ account.

4.1.10 Credit & Marketing Department Obtain regularly customers’ transactions report Monitor the customer's business to evaluate progress made and give situation report. Liaise with customer regularly to ensure repayment are made as at when due.

TRANSACTIONAL CYCLE AT SEEDVEST MFB

4.2 Key Personnel

4.2.1 Board

Seedvest’s Board currently comprises:

Chief Olusola Adekanola FCA, FCCA. (Chairman)

An astute and highly enterprising accountant, Chief Adekanola is a household name in the Nigerian accounting profession. He is a Fellow of the Chartered Association of Certified Accountants - United Kingdom, and also a Fellow of the Institute of Chartered Accountants of Nigeria. He pioneered the now famous Accelerated Revenue Generation Program which has remendously assisted over 26 States of Nigeria in improving their Internally Generated Revenue.

Chief Olabisi Ogunjobi - Director

Chief OGUNJOBI is the former Vice President of the African Development Bank (“ADB”) and was Nigeria’s candidate at the election for the post of the President of ADB in 2005. A veteran international development economist with over 35 years of national and international financial and development banking experience, he consults for several international organisations.

Chief Ogunjobi has received national honours of the Officer of the Order of Niger of the Federal Republic of Nigeria, Chevalier de l’Ordre du Merite of Burkina Faso, Chevalier de l’Ordre National of the Republic of Mali and Officier de l’Ordre du Merite of the Republic of Niger. He also holds traditional titles from Nigeria and Cameroon. Chief Ogunjobi holds a B.Sc. degree in Economics from the University of Ibadan, and an MA degree in International Development Studies from Bradford University in the United Kingdom.

Kehinde Oyeleke (ACA, CPA, MBA) – Group Managing Director

Kehinde Oyeleke started his career in the Corporate Finance division of Arthur Andersen, before specializing in Corporate Tax and Business Advisory. He later joined the Transaction Structuring Group of PricewaterhouseCoopers in New York, where he was involved in Mergers and Acquisition deals involving Fortune 500 corporations. Kehinde is a Certified Public Accountant, licensed in the state of New York, and is also an Associate of the Institute of Chartered Accountants of Nigeria. He holds an MBA in Finance and Strategic Management from the Wharton School of the University of Pennsylvania.

Mr. Yomi Bello (ACA) - Director

Yomi started his career in Guaranty Trust Bank, where he had a career that spanned retail and commercial banking, and developed skills in deposit. mobilization, customer management, activity & performance reporting and team building & management. He left the Bank in 2006 to set up The Strategos Company (a consulting outfit with offerings in Strategy, Human Performance & Customer Relationship Management). His consulting experience over the past 4 years covers business restructuring, policy & procedure reviews, strategy, business development, recruitment and training. Yomi joined the Seedvest Group in 2008 as Head, Strategy & Business Development for the group where he currently has responsibility for business development, strategic direction and change management for the group.

Yomi has a Bachelor’s Degree in Accounting, and is an associate of the Institute of Chartered Accountants of Nigeria (ICAN).

4.2.2 Management

1. Akinbode, Olaniyi Tajudeen (General Manager)

Niyi has over 10 years proven expertise in banking operations and over 5 years background in credit and marketing. He had HND in Accountancy Post Graduate Diploma in Credit and Financial Management. He is an Associate of the Institute of Credit Administration, Associate Member of the Nigerian Institute of Management, Associate of the Institute of Corporate Treasurers and Accountants and also a member of the Chartered Institute of Bankers. He commenced his career at Wema Bank Plc from 1990 to 1992 and later to Trans International Bank Plc where he worked as the Credit Manager and Operations Manager at different dates between 1992 to 2005. He later moved on to Spring Bank Plc where he worked as Manager from January to May, 2006 before joining the services of Seedvest Limited in March, 2009 where he worked as Regional Manager till January, 2010 when he was seconded to lead the management team of Seedvest Microfinance Bank as the General Manager. His gross remuneration per annum is N3,625,000.00

2. Ajayi, Adebayo Joachim (Financial Controller)

Bayo commenced his career with the Federal Office of Statistics where he worked as Statistician I from August, 1982 to May, 1987. He thereafter proceeded to Ernst & Young (Chartered Accountants) where he worked in various auditing roles from 1987 to 1999 before he was engaged by Peak Merchant Bank Ltd from June, 1999 to February, 2003 as Head, Inspectorate, later Head of Accounts and later Head of Operations Department. He thereafter proceeded to Studio Press (Nigeria) limited from May, 2003 to May, 2005 where he worked as the Chief Accountant before leaving to Industrial Cartons Limited as Head of Import and Export Department from June, 2005 to February, 2009. He joined the Seedvest Group in April 2009, and was seconded to Seedvest Microfinance Bank Limited as Head, Financial Control Department from July, 2009 to date with a gross annual remuneration of N2,980,000.00. Bayo holds a Bachelors as well as a Masters Degree in Statistics, and is an Associate of the Institute of Chartered Accountants of Nigeria (ICAN) since 1991. He is also a member of the Chartered Institute of Taxation of Nigeria (CITN) since 1995.

3. Akindejoye, John (Head Internal Control & Audit)

John has bachelors and Masters Degree in Finance and Banking in 1982 and 2004 respectively. He is an Associate of the Chartered Institute of Bankers (ACIB) and also a Member of the Institute of Chartered Accountants of Nigeria (ICAN). He also holds a Post Graduate Certificate in Lending and Credit Administration. He prides himself in his over 25 years experience on the job, 15 of which has been gained from the banking industry in various institutions ranging from UBA Plc, Omuoke Community Bank Ltd, Ekiti State, Ala Community Bank, Akure and Atiba Iyalamu Savings and Loans Limited. He joined the Seedvest Group in October, 2007 and was seconded as a pioneer management staff of Seedvest Microfinance Bank Limited where he has handled several management positions, lately as Head, Internal Control and Audit. His gross annual remuneration is N2,235,250.00.

4. Eromosele, Simon (Head, Legal & Compliance/Company Secretary)

Simon currently acts as the Company Secretary/Legal Adviser of the Bank. He holds a Bachelors Degree as well as a Masters Degree in Law. He is a professional member of the Nigerian Bar Association and the Nigerian Institute of Management. Simon developed his career in various law chambers where he was engaged in active legal practice before joining the Bank on 1st August, 2008 as its pioneer Head of Legal & Compliance Department with an annual gross remuneration of N1,200,000.00.

5. Afolabi, Bolanle (Branch Manager, Dugbe Branch)

Bola is a seasoned banker and an Associate of the Chartered Institute of Bankers (CIBN). She holds a Masters Degree in Business Administration from Adekunle Ajasin University, Akungba, Ondo State. She developed her professional career at the defunct Co operative Bank Plc where she worked for over 20 years (1986 – 2006) rising through the ranks to the level of Manager. She commenced her career with Seedvest Microfinance Bank on 1st April, 2008 as the pioneer Branch Manager of Bodija Branch from where she was transferred to the position of Branch Manager of Dugbe Branch (situated at the Head Office). Her gross annual remuneration is N1,862,500.00.

6. Akinjoko, Omolola (Manager, Challenge Branch)

Lola has worked as the Head of Accounts and Admin at Trans International Bank Plc from 1989 to 2005, Operations Manager of Spring Bank Plc from 2005 – 2006, Credit and Marketing Manager of Ikire Microfinance Bank from 2008 to 2009 and as MD/CEO of Corporate Microfinance Bank Ltd from July, 2009 to November, 2009, when she joined the Bank. She holds a Bachelors Degree in Business Administration from the University of Lagos, and a Masters Degree in Business Administration from the Ladoke Akintola University, Ogbomosho. Since her emergence in the Bank, she has been assigned the role of Branch Manager of Challenge Branch with a gross remuneration per annum of N1,787,500.00.

7. Afolabi, Lolade Kudrat (Branch Manager, New Gbagi Branch)

Lolade holds a Bachelor’s Degree in Physics/Educational Management and a Masters Degree in Industrial and Labour Relations both from the University of Ibadan. She had a stint in the public service where she worked as Vice Principal (Admin) in various schools under the Oyo State Teaching Service Commission from 1982 to 1998. She thereafter proceeded to the banking industry, first at Trans International Bank Plc where she worked as Pro Manager from 1998 to 2006 and later at Spring Bank Plc where she worked as the Customer Service Officer in 2006 before proceeding to the accounting firm of Olusola Adekanola & Co where she worked from 2006 to the date of her appointment in the Bank in November, 2008. She commenced her career in Seedvest Microfinance Bank as the Head, Marketing Department from where she was transferred to the post of Branch Manager, Agbeni Cash Centre and lately Branch Manager, Gbagi Branch with a gross remuneration per annum of N1,490,000.00.

8. Oyedele, Philip Adeoye (Head, Credit Administration)

Philip is a member of the Institute of Chartered Accountants of Nigeria (ICAN). He graduated with Upper Credit in Accountancy from the Osun State Polytechnic, Iree in March, 2001 after which he joined Seedvest Limited in September, 2003 as an Accountant and became the pioneer Accountant of Seedvest Limited, Ibadan Branch from January, 2006 to 2007 when the operations of the Company became subsumed into the newly incorporated Seedvest Microfinance Bank where he also worked as the pioneer Head of the Internal Control and Risk Management Department. He has worked in various roles in the Bank ranging from Head, Risk Management Department, pioneer Head, Financial Control Department, pioneer Head, Recovery Department and until lately, Head, Credit Administration Department. Philip brings in a lot of passion, commitment and integrity to the team making him a crucial team member. His gross remuneration per annum is N900,000.00.

4.3 Support Personnel

1. Adepoju Deborah Manager, Samonda Br. N1,800,000 2. Adefioye Bade Manager, Gate Branch N1,043,000 3. Alakiu Oluwaseun Head, Hr & Admin N894,000 4. Akanbi Olusola Head, It Dept N1,737,500 5. Olawoye Olusola Head, Recovery N1,112,000

4.4 Technology

The newly deployed technology is Orbit Banking Application. Orbit is a core banking application professionally developed by Neptune Software Plc for small financial institutions. Orbit is a robust application that is made up of about six modules each of which designed to

handle specific process of the banking transactions. Such modules include Account Processing, Teller Processing, System Administration, Report Processing, Nightly Processing, etc. The application sits on Sybase Database Management System which is a relational database suitable for banking database. Orbit Banking Application is being used mainly by banking institutions such as commercial, mortgage, and microfinance banks both in Nigeria and other countries in Africa. The following under listed banks amongst others have been using Orbit as their banking application for a period spanning over a year:1. Stanbic IBTC Bank Plc

2. Moorgate Microfinance Bank situate at Bode Thomas, Lagos, Nigeria.

3. King Solomon Fund Microfinance Bank situate at Surulere, Lagos, Nigeria.

4. People Serve Microfinance Bank situate at Surulere, Lagos, Nigeria.

5. Pearl Microfinance Bank situate at Berger, Lagos, Nigeria

6. Omni Microfinance Bank situate at Ikeja, Lagos, Nigeria

7. GS Microfinance Bank situate at Ikeja, Lagos, Nigeria

8. Amal Bank in Ghana

The following are the fundamental basis for chosen Orbit as our main banking application:

1. Sufficient Functionalities: The application provides all functionalities we require to run our banking activities smoothly. Access Control, Chart of Account, General Ledger, Loan & Deposit, etc are some of the functionalities that are sufficiently provided. 2. Mobile Banking Technologies: Orbit provides opportunities to deploy mobile banking services to our esteem customers. Such services are SMS Alerts, Balance Enquiries, Mobile Transactions (fund transfers), etc 3. Adequate Reporting Facilities: Decisions making processes have been made easy as reports required for such are easily generated by the application. 4. Support To Business Expansion Projects: The robustness of this application has made it suitable to accommodate our development and expansion projects as new branches can easily be created on the application. 5. Simplicity and completeness: The application is simple to use and at the same time is detailed enough to address all banking transactions.

5 Finance

5.1 Expenses

Historical summary expenses for the Bank are as follows:

Items of Expenses

6 months ended 31-12-07

Year ended31-12-08

Year ended31-12-09

2 months ended28-02-10

=N= '000 =N= '000 =N= '000 =N= '000

Insurance - 97 217 339

Depreciation 12,062 11,425 22,991 3,253

Maintenance 781 2,278 2,890 1,146

Staff Cost 9,873 40,798 71,730 10,201

Other Overhead

7,081 62,900 79,350 11,324

49,797 117,498 177,178 26,263

The 2007 and 2008 figures are audited, while the 2009 figures are unaudited.

Major components of Other Overhead include office rent, telephone expenses, and travels. 2009 overheads include proposed write-off of some assets and investments, deemed bad and irrecoverable.

There are no monthly fluctuations or seasonality in the Bank’s financials.

Increases in costs have aligned with the general increase in the Bank’s activities.

Expenses for the next 3 years are projected as follows:

YR 1 YR 2 Y R 3

=N= '000 =N= '000 =N= '000

Insurance 1,026 1,231 1,477

Depreciation 27,589 26,210 24,899

Maintenance 3,468 4,162 4,994

Staff Cost 86,076 91,987 92,102

Other Overhead 75,052 82,100 85,140

193,211 205,690 208,613

5.2 Financial Discussion

The Bank currently has authorised share capital of N600million, out of which N350million is paid-up. Deposit liability is currently about N83million, and projected to increase to about N150million during the year. What is needed at this point is an infusion of about N150million to shore up the Bank’s loan book, even as efforts to genuinely increase its deposit liabilities as well as its shareholders’ funds are ongoing.

5.2.1 Creditors

The bank has no other creditors than the Current and Savings accounts depositors. Total deposits liabilities as at 18-03-10 stood at N 82.7 million.

5.2.2 Debtors

The bank debtors are the various loan customers. Most of the loans and advances have various tenors ranging between 1 month and 6 months, with an average of about 3 ½ months tenor.These loans attract various interest rates ranging from 3 ½ to 7 % per month, depending on the product. The Bank's loan portfolio as at 28-02-10 stood at N 269.4 million.

Proposed Funding Structure (N'000)

GROFIN Own Fund Others Total

Assets - 65,919 - 65,919

Loans/Onlending 150,000 269,400 - 419,400

Statutory Deposits/Others-

14,681 82,700 97,381

150,000 350,000 82,700 582,700

6 Risks & Mitigants

Seedvest as a microfinance operator face the following risks;

i) Default Risks This is the risk that borrowers from the Bank would be unwilling or unable to repay their loans. It is a risk that increases as the economic situation in the country worsens. There is a possibility that the capital base of the Bank along with other funds secured by it may be eroded by such credit losses. To mitigate this risk, we have developed a rigorous credit approval system, which, while not totally foolproof, significantly reduces the risks of bad credit application going through. In addition, the Banks has a fully staffed loan recovery team, whose main responsibility is the collection of past due loans. We have equally learnt from past mistakes and have blacklisted habitually risky borrower classes. We continue to review operations to evaluate bad loan problems and seek timely solutions. We are in addition partnering with a credit bureau, named Credit Registry, to obtain the credit records of loan applicants to ensure that potential borrowers have good credit history, and are not unduly indebted to other institutions. Lastly, the failure of major banks to extend credit to businesses has given Seedvest access to a higher profile customer group than was historically the case. We intend to keep these customers satisfied, even as we seek other credible customer groups. ii) Funding Shortage Microfinance banks have severe limitations in terms of access to onlending facilities. For one, they do not have the deposit mobilization prowess of the major banks. In addition, they typically cannot access loans from banks for onlending to their customers. While this situation is understandable for many microfinance banks, given their very weak structure, they pose a major headache for serious players like Seedvest. We are mitigating this risk by opening up discussions with credible investors. In addition, we are working toward the scale required to access medium term private equity funding. We also intend to strengthen our deposit mobilization to minimize the need to rely on equity type funding for lending purposes, since our mandate as a bank is to engage in financial intermediation. iii) Policy Inconsistent by CBN and Other Regulators The Bank and other sector players might be at the mercy of policy reversal by the Central Bank of Nigeria and other regulators. Such a reversal might increase competition or complicate the Bank’s plans and projections. We believe a complete policy reversal is unlikely at this point, given how much the society as a whole is vested in microfinance banking. We equally believe the Bank has reached a size where policy issues are more likely to work in its favour than against it. iv) Personnel Issues Progressive growth has meant that the Bank will continuously require high quality staff to drive the business. There is the risk that such staff may not be available at the right cost.

The Bank as a matter of strategy will not pursue any aggressive growth plan that could water down the quality of its services. Our plan from the start has been to combine experienced hiring with a very rigorous training schedule to ensure that our staffs are up to date and technically equipped to provide needed service.

7 Support Beyond Finance

Seedvest is a small business dealing with characteristic SME issues. In additions, it faces issues that have to do with credit administration and recovery of loans. It needs help to navigate these issues, and it is believed that given GROFIN’s extensive network, it could be of tremendous help to the Bank in accessing relevant training and technical partnership that can further cement its leadership position within Nigeria’s financial services sector.