• Friday, June 14, 2024
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NEXIM Bank’s loan options

NEXIM Bank’s loan options

Easy credit access is a sine qua non for smooth trade and investment. Upon this recognition, the Nigerian Export-Import (NEXIM) Bank offers a number of loans to importers and exporters to increase contribution of trade to the Gross Domestic Product (GDP) and ensure that Nigeria realises the all-inclusive growth target.

“NEXIM lends money directly to Nigerian exporters to fund their purchase of capital goods, raw materials, packaging materials, spare parts through our Direct Loans facility,” a statement on NEXIM’s website says.

“The facility also covers the provision of infrastructure as well as revitalisation and modernisation of plants/machinery. Providers of export services in the areas of consultancy, tourism, oil and gas etc are also eligible for support,” the statement further says.

One of the credit facilities provided by NEXIM is called the Direct Lending Facility(DLF). This is a method by which NEXIM lends money directly to Nigerian exporters to fund their purchase of capital goods, raw materials, packaging materials, spare parts through our direct loans facility.

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NEXIM says under the Direct Lending Facility, it would grant short, medium and long term fixed rate loans, to exporters directly and/or under co-financing/syndication arrangement with eligible banks. The bank also says that direct loans are available to assist exporters complete their export sales, through the provision of working capital and/or facilities and funds for procurement of equipment.

“Services include, but are not limited to consultancy, tourism, oil and gas services provided by Nigerians. Loans

are granted directly to a Nigerian exporter in both local and foreign currencies up to 80 percent of  the total project cost,” the bank says.

Next equally has the Export Credit Guarantee Facility. According to NEXIM, this is designed to protect Nigerian banks against the risks of non-payment for loans or advances granted to exporters to meet short-term export contracts.

Another facility offered by NEXIM is known as Export Credit Insurance Facility. This is designed to protect exporters against commercial and political risks associated with export business.

This facility enables exporters to diversify their export market without fear of the risk inherent in dealing with new buyers. It is also targeted at attracting new enterprises or businesses into the export market, while encouraging exporters to extend credit terms to their buyers in order to enhance their competitiveness in the international markets.

Some of the required documents for this facility include certified true copy of certificate of incorporation, current three years tax clearance certificate; audited statement of accounts for the last three  years and feasibility report, among others.

Another facility called the Foreign Input Facility provides manufacturers of export products loans in foreign currency to import capital equipment, packaging and raw materials to produce finished products for export.

To access this facility, the business person first applies to the facilitating bank, after which the bank will assess the application based on existing lending rules.

Third, the bank forwards the loan request to NEXIM with relevant documents, while NEXIM disburses the requested loan to the participating bank upon fulfilment of all conditions precedent to draw down.

Some of the requirements for this facility include a letter signed by two authorised signatories of the bank; certified true copy of certificate of incorporation; audited statement of accounts for the last three  years and the most recent management accounts, among others.

There is also the Export Trade Support Facility, which is a medium to long-term facility provided in local currency to enable exporters finance capital purchases and other activities that would require more than one year to repay.

NEXIM also offers the Local Input Facility, that grants  short, medium and long term fixed rate loans in local currency to participating banks on behalf of their export clients.This facility is aimed at setting up new export projects, revatilising and expansion of production units as well as acquisition, rehabilitation and expansion of plantations for the production and processing of exportable products (basically for agric ).

Furthermore, the Rediscounting and Refinancing Facility is available to assist commercial and merchant banks to provide short-term finance in support of exports. It is aimed at influencing the cost of credit to the export sector directly or indirectly; enhancing its competitiveness as well as encouraging banks to finance the procurement of non oil export goods, raw materials, and processing., NEXIM says.