Post by Trade facilitator on Apr 10, 2021 16:04:01 GMT 1
Nigerian Export-Import Bank (NEXIM) Is Introducing Export Development Facility (EDF) For Nigerian Exporters
Members of this forum and other exporters need no introduction to what Nigerian Export-Import Bank (NEXIM) stands for, or what their functions are in the economy of Nigeria.
The Bank is involved in financing import and export loans for Nigerian companies over a long period of time.
In this article, we are not here to talk about NEXIM as a financial institution, but rather to talk about a new export facility being introduced by the bank.
Now let us look at what this new facility being introduced by NEXIM is all about. Come along with us on the journey.
The Export Development Facility (EDF) is being introduced by the Nigerian Export-Import Bank (NEXIM) arising from the Central Bank of Nigeria’s (CBN) investment in a N50 billion Debenture issued by NEXIM. The debenture was issued to stimulate and increase deliberate funding, especially to Small and Medium Enterprises (SMEs) towards facilitating regional industrialization for value added export basket and market destinations.
First off, what is a debenture? According to Investopedia, a debenture is a type of bond or other debt instrument that is unsecured by collateral.
Since debentures are not backed by any collateral, they must rely on the credit worthiness and reputation of the issuer for support.
Remember that most government establishments rely on their stand as government agencies to issue debentures to raise funds for capital to execute projects.
They stated that the facility will be used to support export oriented enterprises in the non-oil export value chain.
This is where our members belong, we are in the non-oil export value chain, the farmer is in the value chain, so also the trucker that takes goods from the farm to the processing centers; and of course the exporters themselves.
They stated that a bank seeking to benefit from the loan shall be of good financial health as evidenced by its audited accounts for the preceding three years, current market information, and able to meet criteria set by NEXIM from time to time.
This means that you must know the financial standing of your local bank before you start applying through them, to avoid wasting of precious time.
Exporters to be covered by the facility
To benefit from the facility, the exporting company must be duly incorporated, registered in Nigeria as a limited liability company or cooperative society.
The company must be producing goods or services for direct export.
It must be using at least 60% of local raw materials for the manufacturing of its products.
Eligibility Criteria
The bank stated that only export-oriented enterprises shall be eligible under the EDF. Such shall also be:
Duly registered/incorporated in Nigeria.
Commercially viable and have relationship with established counterparties and contracts with verifiable export off-takers.
Must have a satisfactory credit report obtained from at least two credit bureau.
Projects in sectors that impact women and youth employment with deliberate focus on women/youth empowerment in the export value chain.
Projects with regional export promotion/export development objectives and/ or promoted by states as a private sector export enterprise.
Eligible Transactions
Eligible transactions to qualify for funding under the EDF shall include:
Transactions connected with export of goods wholly or partly processed or manufactured in Nigeria.
Transactions relating to export of commodities and services, which are exportable under the law.
Transactions that support manufacturing or packaging for exports.
Transactions of value added production supported by states/Regions and promoted by private sector companies.
Please make more enquiries by visiting: www.neximbank.com.ng
Members of this forum and other exporters need no introduction to what Nigerian Export-Import Bank (NEXIM) stands for, or what their functions are in the economy of Nigeria.
The Bank is involved in financing import and export loans for Nigerian companies over a long period of time.
In this article, we are not here to talk about NEXIM as a financial institution, but rather to talk about a new export facility being introduced by the bank.
Now let us look at what this new facility being introduced by NEXIM is all about. Come along with us on the journey.
The Export Development Facility (EDF) is being introduced by the Nigerian Export-Import Bank (NEXIM) arising from the Central Bank of Nigeria’s (CBN) investment in a N50 billion Debenture issued by NEXIM. The debenture was issued to stimulate and increase deliberate funding, especially to Small and Medium Enterprises (SMEs) towards facilitating regional industrialization for value added export basket and market destinations.
First off, what is a debenture? According to Investopedia, a debenture is a type of bond or other debt instrument that is unsecured by collateral.
Since debentures are not backed by any collateral, they must rely on the credit worthiness and reputation of the issuer for support.
Remember that most government establishments rely on their stand as government agencies to issue debentures to raise funds for capital to execute projects.
They stated that the facility will be used to support export oriented enterprises in the non-oil export value chain.
This is where our members belong, we are in the non-oil export value chain, the farmer is in the value chain, so also the trucker that takes goods from the farm to the processing centers; and of course the exporters themselves.
They stated that a bank seeking to benefit from the loan shall be of good financial health as evidenced by its audited accounts for the preceding three years, current market information, and able to meet criteria set by NEXIM from time to time.
This means that you must know the financial standing of your local bank before you start applying through them, to avoid wasting of precious time.
Exporters to be covered by the facility
To benefit from the facility, the exporting company must be duly incorporated, registered in Nigeria as a limited liability company or cooperative society.
The company must be producing goods or services for direct export.
It must be using at least 60% of local raw materials for the manufacturing of its products.
Eligibility Criteria
The bank stated that only export-oriented enterprises shall be eligible under the EDF. Such shall also be:
Duly registered/incorporated in Nigeria.
Commercially viable and have relationship with established counterparties and contracts with verifiable export off-takers.
Must have a satisfactory credit report obtained from at least two credit bureau.
Projects in sectors that impact women and youth employment with deliberate focus on women/youth empowerment in the export value chain.
Projects with regional export promotion/export development objectives and/ or promoted by states as a private sector export enterprise.
Eligible Transactions
Eligible transactions to qualify for funding under the EDF shall include:
Transactions connected with export of goods wholly or partly processed or manufactured in Nigeria.
Transactions relating to export of commodities and services, which are exportable under the law.
Transactions that support manufacturing or packaging for exports.
Transactions of value added production supported by states/Regions and promoted by private sector companies.
Please make more enquiries by visiting: www.neximbank.com.ng
