Post by Trade facilitator on Jan 3, 2022 18:46:09 GMT 1
The Nigerian Export-Import Bank (NEXIM) is an export credit agency in Nigeria, it was established in 1991. In its function, NEXIM focuses on the development and expansion of the non-oil sectors of the Nigerian economy, with a view to reduce the country's over-reliance on oil exports. It was established as an Export Credit Agency (ECA). NEXIM is mandated to: Provide export finance. Offer export credit guarantees.
NEXIM Bank operates as a development finance Institution (DFI) with the main objective of developing the high growth sectors of the economy. NEXIM Bank plays a complementary role to commercial banks and unlike commercial banks, NEXIM does not accept customer deposits.
NEXIM’s services are targeted at the export sector, with specific focus on the underserved market segments which the commercial banks initially find unattractive or too risky.
The statutory functions of the Bank include providing finance, risk bearing services as well as trade and market information and export advisory services to the Nigerian export community.
The Bank presently provides short and medium term loans to Nigerian exporters. It also provides short term guarantees for loans granted by Nigerian Banks to exporters as well as credit insurance against political and commercial risks in the event of non-payment by foreign buyers. The Bank is also the government’s National Guarantor under the ECOWAS Inter-state Road Transit programme.
Facilities available to exporters from NEXIM Bank
STOCKING FACILITY (SF): this is specifically designed to assist manufacturing exporters to have adequate working capital to stock local raw materials that are mainly seasonal in nature in order to achieve optimum level of production all year round. It is an interbank facility made available to exporters in local currency for a maximum term of 360 days.
LOCAL INPUT FACILITY (LIF): This is a medium/long-term facility disbursed in local currency for the purpose of asset acquisition/modernization, and/or expansion of existing production units for exports. The facility is also made available for the acquisition, rehabilitation and/or expansion of production and processing of exportable products. The facility has a maximum tenor of seven (7) years inclusive of a moratorium period of not more than two (2) years.
FOREIGN INPUT FACILITY (FIF): This provides manufacturers of export products, foreign currency loans to import capital equipment, packaging and raw materials to produce finished products for export. The facility has a maximum tenor of seven (7) years which is inclusive of a moratorium period of not more than two (2) years. It is repayable in foreign currency.
EXPORT CREDIT GUARANTEE FACILITY (ECGF): This facility is operated as a guarantee provided to banks in respect of credit given to exporters in support of the export of goods and services from Nigeria. It also enables Nigerian exporters to access credit internationally on terms that are more competitive than that offered within the local market.
EXPORT CREDIT INSURANCE FACILITY (ECIF): This facility insures exporters against risk of non-payment by buyers where such default is ascribable to commercial/economic causes. Payment defaults due to political reasons are covered separately by NEXIM for the account of the Federal Government of Nigeria.
ECOWAS INTER-STATE ROAD TRANSIT SCHEME (ISRT): In line with ECOWAS protocol on free movement of persons, goods and services, NEXIM was appointed the National Guarantor under the ECOWAS Inter-state Road Transit Scheme to guarantee goods transiting Nigeria to other ECOWAS countries. The scheme, which is designed to promote free flow of goods among member states, seeks to eliminate the time wasting escort system and diversion of goods consigned to specific destinations in the ECOWAS sub-region.
ECOWAS TRADE SUPPORT FACILITY (ETSF): This Facility is designed to improve the flow of trade from Nigeria to the sub-region, enhance price competitiveness and deepen the regional payment system. It involves the granting of a Line of Credit or a Guarantee to facilitate the purchase by an ECOWAS importer of Nigerian Goods.
NIGERIAN CREATIVE AND ENTERTAINMENT INDUSTRY STIMULATION LOAN SCHEME (NCEILS): The Loan is intended to address issues regarding the institution of credible structures, attract investment in the development of content and infrastructure in the media and entertainment sector as well as improvement in production standards, distribution, and marketing and exhibition standards of the sector. The categories eligible for funding support include the Production, Distribution, Exhibition of Film, Television, Radio and Fashion and the creation of Distribution Infrastructure/Platforms, etc.
NEXIM's Managed Funds:
REDISCOUNTING AND REFINANCING FACILITY (RRF): The RRF is a short term interbank facility which NEXIM avails to the commercial banks, to enable them refinance their export bills/transactions. The facility is available for a maximum tenure of 360 days at a rate of 6%p.a., enabling the commercial bank to maintain their liquidity and provide cheaper credit to Nigerian exporters. The Bank currently has a N50 Billion RRF window available to it by the CBN.
EXPORT STIMULATION FACILITY (ESF): The N500bn Export Stimulation Facility is a long term facility with a tenor up to 10 years, available to all operators in the export value chain, including start-ups and existing projects wishing to expand. It is available as a working capital/stocking facility or for acquisition of plant and machinery for processing and packaging of goods for export.
The ESF comes at a maximum cost of 7.5% for short tenured transactions up to 3 years, and 9% for longer term transactions up to 10 years
Under the scheme, exporters can apply for a maximum of N5 Billion. All applications under the scheme are expected to be submitted to NEXIM through Participating Financial Institutions (PFI), which could be a Commercial Bank or other Development Finance Institutions. The PFI will then forward such applications to NEXIM, after satisfactory review in line with the eligibility criteria provided in the guidelines. NEXIM will in turn further review the application and forward the applications to the Central Bank of Nigeria for approval and funding.
THE FUNCTIONS OF THE NIGERIAN EXPORT AND IMPORT (NEXIM) BANK
Guarantee & Insurance Corporation earlier set up under Act 15 of 1988, has the following main statutory functions: –
Provision of export credit guarantee and export credit insurance facilities to its clients.
Provision of credit in local currency to its clients in support of exports.
Establishment and management of funds connected with exports.
Maintenance of a foreign exchange revolving fund for lending to exporters who need to import foreign inputs to facilitate export production.
Provision of domestic credit insurance where such a facility is likely to assist exports.
Maintenance of a trade information system in support of export business.
The Bank presently provides short and medium term loans to Nigerian exporters. It also provides short term guarantees for loans granted by Nigerian Banks to exporters as well as credit insurance against political and commercial risks in the event of non-payment by foreign buyers. The Bank is also the government’s National Guarantor under the ECOWAS Inter-state Road Transit programme.
HOW TO ACCESS NEXIM BANK FACILITIES
The fundamental criterion to all our financing is that the exporter must be a duly registered Nigerian company and also registered with the Nigerian Export Promotion Council (NEPC) as an exporter.
The Bank’s Facilities are available in two forms:
Directly: Whereby the applicant applies for financing directly to NEXIM. In this respect, all documentation requirements are submitted directly to NEXIM Bank. If the application is successful, the Bank administers and monitors the facility directly.
Through commercial Banks: This allows NEXIM to take advantage of the extensive coverage offered by the banking system to reach all eligible exporters. As such, exporters applying for facilities are required to submit relevant documents to their chosen banker. Upon a successful application and acceptance of the offer, the commercial bank administers and monitors the facility and updates NEXIM on the facility regularly.
NOTE: There are no specific banks through which NEXIM disburses its loan facilities. All licensed banks are eligible to access NEXIM support. To participate in the schemes offered, the Bank undertakes an assessment of the banks based on their financials, categorizes them and sets exposure limits or credit lines under which they can draw to refinance their export portfolio. These categories are from A to E with category ‘A’ banks enjoying the highest limit.
After the submission of the application, Processing & Approval of the application takes between 4 – 12 Weeks. This however, depends largely on the client’s submission of complete documentation by the client.
The Bank evaluates each application on its merits, by conducting due diligence on the project, the relevant corporate entities such as sponsor, borrower, supplier/contractor, guarantors. The review also covers assessment of the market, the financial projections and the destination of export in addition to the agreements and contracts pertaining to the transaction.
The schedule officer shall ensure that search reports from Corporate Affairs Commission (CAC), CBN Credit Bureau or in the case of title document, from the relevant Land Registry, verifying the authenticity of the documents submitted are also obtained.
NEXIM Bank operates as a development finance Institution (DFI) with the main objective of developing the high growth sectors of the economy. NEXIM Bank plays a complementary role to commercial banks and unlike commercial banks, NEXIM does not accept customer deposits.
NEXIM’s services are targeted at the export sector, with specific focus on the underserved market segments which the commercial banks initially find unattractive or too risky.
The statutory functions of the Bank include providing finance, risk bearing services as well as trade and market information and export advisory services to the Nigerian export community.
The Bank presently provides short and medium term loans to Nigerian exporters. It also provides short term guarantees for loans granted by Nigerian Banks to exporters as well as credit insurance against political and commercial risks in the event of non-payment by foreign buyers. The Bank is also the government’s National Guarantor under the ECOWAS Inter-state Road Transit programme.
Facilities available to exporters from NEXIM Bank
STOCKING FACILITY (SF): this is specifically designed to assist manufacturing exporters to have adequate working capital to stock local raw materials that are mainly seasonal in nature in order to achieve optimum level of production all year round. It is an interbank facility made available to exporters in local currency for a maximum term of 360 days.
LOCAL INPUT FACILITY (LIF): This is a medium/long-term facility disbursed in local currency for the purpose of asset acquisition/modernization, and/or expansion of existing production units for exports. The facility is also made available for the acquisition, rehabilitation and/or expansion of production and processing of exportable products. The facility has a maximum tenor of seven (7) years inclusive of a moratorium period of not more than two (2) years.
FOREIGN INPUT FACILITY (FIF): This provides manufacturers of export products, foreign currency loans to import capital equipment, packaging and raw materials to produce finished products for export. The facility has a maximum tenor of seven (7) years which is inclusive of a moratorium period of not more than two (2) years. It is repayable in foreign currency.
EXPORT CREDIT GUARANTEE FACILITY (ECGF): This facility is operated as a guarantee provided to banks in respect of credit given to exporters in support of the export of goods and services from Nigeria. It also enables Nigerian exporters to access credit internationally on terms that are more competitive than that offered within the local market.
EXPORT CREDIT INSURANCE FACILITY (ECIF): This facility insures exporters against risk of non-payment by buyers where such default is ascribable to commercial/economic causes. Payment defaults due to political reasons are covered separately by NEXIM for the account of the Federal Government of Nigeria.
ECOWAS INTER-STATE ROAD TRANSIT SCHEME (ISRT): In line with ECOWAS protocol on free movement of persons, goods and services, NEXIM was appointed the National Guarantor under the ECOWAS Inter-state Road Transit Scheme to guarantee goods transiting Nigeria to other ECOWAS countries. The scheme, which is designed to promote free flow of goods among member states, seeks to eliminate the time wasting escort system and diversion of goods consigned to specific destinations in the ECOWAS sub-region.
ECOWAS TRADE SUPPORT FACILITY (ETSF): This Facility is designed to improve the flow of trade from Nigeria to the sub-region, enhance price competitiveness and deepen the regional payment system. It involves the granting of a Line of Credit or a Guarantee to facilitate the purchase by an ECOWAS importer of Nigerian Goods.
NIGERIAN CREATIVE AND ENTERTAINMENT INDUSTRY STIMULATION LOAN SCHEME (NCEILS): The Loan is intended to address issues regarding the institution of credible structures, attract investment in the development of content and infrastructure in the media and entertainment sector as well as improvement in production standards, distribution, and marketing and exhibition standards of the sector. The categories eligible for funding support include the Production, Distribution, Exhibition of Film, Television, Radio and Fashion and the creation of Distribution Infrastructure/Platforms, etc.
NEXIM's Managed Funds:
REDISCOUNTING AND REFINANCING FACILITY (RRF): The RRF is a short term interbank facility which NEXIM avails to the commercial banks, to enable them refinance their export bills/transactions. The facility is available for a maximum tenure of 360 days at a rate of 6%p.a., enabling the commercial bank to maintain their liquidity and provide cheaper credit to Nigerian exporters. The Bank currently has a N50 Billion RRF window available to it by the CBN.
EXPORT STIMULATION FACILITY (ESF): The N500bn Export Stimulation Facility is a long term facility with a tenor up to 10 years, available to all operators in the export value chain, including start-ups and existing projects wishing to expand. It is available as a working capital/stocking facility or for acquisition of plant and machinery for processing and packaging of goods for export.
The ESF comes at a maximum cost of 7.5% for short tenured transactions up to 3 years, and 9% for longer term transactions up to 10 years
Under the scheme, exporters can apply for a maximum of N5 Billion. All applications under the scheme are expected to be submitted to NEXIM through Participating Financial Institutions (PFI), which could be a Commercial Bank or other Development Finance Institutions. The PFI will then forward such applications to NEXIM, after satisfactory review in line with the eligibility criteria provided in the guidelines. NEXIM will in turn further review the application and forward the applications to the Central Bank of Nigeria for approval and funding.
THE FUNCTIONS OF THE NIGERIAN EXPORT AND IMPORT (NEXIM) BANK
Guarantee & Insurance Corporation earlier set up under Act 15 of 1988, has the following main statutory functions: –
Provision of export credit guarantee and export credit insurance facilities to its clients.
Provision of credit in local currency to its clients in support of exports.
Establishment and management of funds connected with exports.
Maintenance of a foreign exchange revolving fund for lending to exporters who need to import foreign inputs to facilitate export production.
Provision of domestic credit insurance where such a facility is likely to assist exports.
Maintenance of a trade information system in support of export business.
The Bank presently provides short and medium term loans to Nigerian exporters. It also provides short term guarantees for loans granted by Nigerian Banks to exporters as well as credit insurance against political and commercial risks in the event of non-payment by foreign buyers. The Bank is also the government’s National Guarantor under the ECOWAS Inter-state Road Transit programme.
HOW TO ACCESS NEXIM BANK FACILITIES
The fundamental criterion to all our financing is that the exporter must be a duly registered Nigerian company and also registered with the Nigerian Export Promotion Council (NEPC) as an exporter.
The Bank’s Facilities are available in two forms:
Directly: Whereby the applicant applies for financing directly to NEXIM. In this respect, all documentation requirements are submitted directly to NEXIM Bank. If the application is successful, the Bank administers and monitors the facility directly.
Through commercial Banks: This allows NEXIM to take advantage of the extensive coverage offered by the banking system to reach all eligible exporters. As such, exporters applying for facilities are required to submit relevant documents to their chosen banker. Upon a successful application and acceptance of the offer, the commercial bank administers and monitors the facility and updates NEXIM on the facility regularly.
NOTE: There are no specific banks through which NEXIM disburses its loan facilities. All licensed banks are eligible to access NEXIM support. To participate in the schemes offered, the Bank undertakes an assessment of the banks based on their financials, categorizes them and sets exposure limits or credit lines under which they can draw to refinance their export portfolio. These categories are from A to E with category ‘A’ banks enjoying the highest limit.
After the submission of the application, Processing & Approval of the application takes between 4 – 12 Weeks. This however, depends largely on the client’s submission of complete documentation by the client.
The Bank evaluates each application on its merits, by conducting due diligence on the project, the relevant corporate entities such as sponsor, borrower, supplier/contractor, guarantors. The review also covers assessment of the market, the financial projections and the destination of export in addition to the agreements and contracts pertaining to the transaction.
The schedule officer shall ensure that search reports from Corporate Affairs Commission (CAC), CBN Credit Bureau or in the case of title document, from the relevant Land Registry, verifying the authenticity of the documents submitted are also obtained.
