ABA Banking Journal - December 2013 - (Page 40)
From corn and beans
to tea and cinnamon
Ag lender's willing expertise takes him to Sri Lanka
"As a kid growing up on a farm in
South Dakota, I never would have
foreseen how international our
industr y has grown," says Nate
Franzen. Yields, markets, and
weather around the globe influence
nearly every aspect of agriculture
and ag finance, but Franzen's own
career recently took an unexpected
turn-one that brought him over
9,000 miles from home.
In August, Franzen, president of
the agribusiness division at First
Dakota National Bank, Sioux Falls,
found himself in Sri Lanka, the
island nation off the tip of India.
American ag lender Nate Franzen visited Sri Lankan
He was on a field trip that included
tea factories like the one pictured above during a tour
stops at tea and cinnamon factories.
sponsored by the World Bank's AgriFin program.
He also saw rubber tree plantations
and small peasant-owned farms.
"It looked like they do a lot of
lenders find ways to adapt. One
manual labor," compared to the mechanization of typical American farms, says
method is to provide financing to
Franzen. Following a long civil war that continues to reverberate, islanders look
processing firms, rather than directly
to the future, he says. "People are very focused on building up an economy. You
to farmers. This enables the producgot the feeling there that in ten years, they will be a long way down the road."
tion chain to occur, while giving lendIndeed, Sri Lanka's violent history gave Franzen pause, but some assurances
ers a source of repayment. By conof safety, and the purpose of the trip, got him on the plane. Franzen's journey
trast, says Franzen, most of his bank's
began when representatives of the World Bank's Agriculture Finance Support
credits are directly to producers.
Facility (AgriFin) program contacted him on the recommendation of John
AgriFin brought a multinational
Blanchfield, senior vice-president at ABA. The purpose of AgriFin-funded
group of lenders and foreign bankers'
by a $20 million grant from the Bill & Melinda Gates Foundation-is to foster
association reps to the ABA National
development of sustainable access to ag financing in the developing world.
Agricultural Bankers Conference in
At first, Franzen was providing information to the program, and then came
November. Many delegates traveled
an invitation to attend AgriFin's Financing Agriculture Forum in Sri Lanka's
to Franzen's bank and ag locales.
capital, Colombo. Initially, planners-who also arranged the field trip-had
The developing world's ag banking
hoped to have Franzen meet the 100-plus delegates one-on-one, and help
challenges moved Franzen: "In the
develop an ag finance benchmarking approach. But then he was drafted to serve
United States, we talk about unceron a formal panel about development of experienced ag lending teams. First
tainty and politics. But we don't realNational has been a noted force in farm finance for years, so it was a natural fit.
ly know what uncertainty is."
Franzen says he learned as much about other commercial bankers' challenges
-Steve Cocheo, executive editor &
in ag lending in developing countries as they learned about U.S. methods. "In
digital content manager
many of these countries, they don't have private ownership of land, or they
For more on the AgriFin program,
may not have strong judicial systems," he says. In some countries, lenders face
go to www.agrifinfacility.org/
the potentiality of government-decreed debt forgiveness. As a result, creative
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