…’South-South businesses can gain more access to loans’
Ways to broaden access to export loans by business owners in the South-South have been disclosed.
The revelation came at the forum of members of the Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA) in Port Harcourt Friday, September 22, 2023.
The technical paper presenter, Soni A. Oseghale, head, Calabar Regional Office of the Nigerian Export and Import (NEXIM) Bank opened the eyes of the business community in the Garden City to why they hardly accessed export funding.
The regional head said most persons in the region get it wrong in seeking NEXIM loans because, “They will not bother to get an experience. They would not have records. They have no financials. Such a person goes about saying NEXIM Bank does not give loan to exporters.”
He helped to show what they should be armed with and basic things to consider before coming to seek loan. “What business are you doing: Manufacturing? Agric? Solid Mineral? At what service level are you (if you are into service)?
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“There is need to collaborate and work together especially in the value chain. Start from somewhere along the value chain. You can supply something in a value chain to someone that is exporting.
“To give loan, we look for history and experience. The major exporter can get loan and finance those in his value chain. Keep your records of supply to the exporter intact, it will help. We can help you build experience. Calabar and Port Harcourt have some businesses that have accessed NEXIM loans.”
He gave an instance, saying palm kernel shells are needed in Poland but that many people use it to pour on muddy roads.
He made it clear that NEXIM cannot take both business and financial risks for a person at same time. “At least, let’s take financial risk only. Single digit loans in NEXIM are good but commercial bank loans are far higher and cannot offer sustainability to an exporter. For instance, if you want to buy and export solid minerals, you cannot take commercial bank loan and meet up because the margin is very thin. Collaborate to succeed.”
Responding to requests for partnership by members of the business community in PH, the NEXIM official urged PHCCIMA members to tell him what they wanted so the bank can structure the collaboration. “It is better you people come together and work on a project and get support.”
Giving insight into the benefits of export, he said foreign exchange scarcity is hitting Nigeria hard but there is nothing the country can do except to boost export trade.
“You cannot print dollar in Nigeria. You must earn it. You export to earn dollar or any foreign currency.”
He said inflation rate was getting very high and growth rate was low, fearing that many more people may go into poverty.
The way out, he insisted, is export route. “Non-oil export is the way to go because relying on oil export is dangerous. All regions have products to export, and NEXIM is here to boost export financing.
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“Our major focus is to de-risk sectors that are not attractive to business people. Exporters cannot afford commercial loan interest rates because cost of production is already very high. If they add about 30 percent interest on capital, their products will not sell abroad.
“So, we at NEXIM do direct lending to exporters and importers, we do de-risking, we do insurance for exporters. We try to reduce capital flight by ensuring that exporters repatriate proceeds, we run export development fund, and finally, we do advisory services (consultancy).”
He advised newcomers to know that to export, they must try and add value.
“To get NEXIM loan: Note: No bribing, not by going straight to the head office (Abuja), etc. NEXIM fund is not a grant. As a loan, it must be paid and to ensure that, it must be secured. There must be risk management.
“There are issues of the borrowers’ character, collateral, etc. NEXIM fund was ravaged by people who treated it as grants, and went about marrying more wives, flexing around the world, travelling by private jets, etc. This nearly eroded the capital base. We failed to realise that we were undoing the nation and our economy.”
Oseghale said Nigerians like to dupe themselves. “Collusion (borrowers and workers inside) was much. Capital in NEXIM is seed money, don’t scatter it.”
Earlier, the PHHCIMA President, Mike Elechi, remarked that the September session was exciting. “The monthly members forum helps to look at the past and prepare for the future. It helps for cross-fertilisation of ideas.”
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The Knight said the September forum is dedicated to looking at export financing and how members can explore export business, with NEXIM Bank as finance partner.
“We will also use the forum to unveil the SME and MSME database scheme in partnership with the Rivers State government. The other is the unveiling of the 2023 Port Harcourt International Trade Fair from December 6 to 20 at Isaac Boro Park, which is being handled by a consultant, Tony Onoja of t-MATH Limited.
