Nigerian Export-Import Bank (NEXIM) loan worth at least ₦10million
The Nigerian Export-Import Bank (NEXIM) was established in 1991 as an Export Credit Agency (ECA).
NEXIM is mandated to:
- Provide export finance
- Offer export credit guarantees
- Provide both domestic and export credit insurance facilities
- Establish and manage funds associated with exports
- Sustain a foreign exchange fund to import foreign inputs — used for export production
- Maintain a trade information system to assist the export business
NEXIM fulfils its role in facilitating the export of goods and services from Nigeria — through 7 regional offices and its headquarters in Abuja.
Funding and types of loans available through the Nigerian Export-Import Bank
Direct Lending Facility
With the Direct Lending Facility, NEXIM can directly provide loans to exporters. This facility can also be used as part of a co-financing or syndication arrangement with eligible commercial banks.
The credit advance can be both short or long-term (1-3 years), while interest rates may be fixed or floating. The loans can be disbursed in both local and foreign currencies, and up to 80% of the total cost of a project or transaction — can be funded.
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This facility can be used for the purposes of working capital and for the acquisition of equipment/machinery — required to produce goods for export. The export of services may also be considered for financing, e.g. consultancy or oil and gas services.
To be eligible for the loan, companies must establish that the credit will help develop or expand their export business.
Foreign Input Facility
Through the Foreign Input Facility, NEXIM grants credit to businesses — with the help of participating banks.
Loans can be disbursed for both short and long-term purposes. As the loan is to procure foreign inputs, it is granted in foreign currency.
Examples of what this facility may finance include the importation of raw materials, capital equipment, spare parts and packaging material — all to be used for the production of goods for export.
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To be eligible for the loan, the local value added to a business's products needs to exceed 50%.
To access this facility, an exporter needs to make an application through a participating commercial bank. The commercial bank will then forward the application, on behalf of the exporter, to NEXIM.
Interest rates are flexible, depending on the amount borrowed and the loan tenure. Repayment terms of 7 years are possible. A moratorium of up to 2 years may also be secured.
Local Input Facility
The Local Input Facility may be used for purchasing any input — that facilitates the export of goods and services from Nigeria.
Things that can be financed include setting up new export projects, expanding factories and modernizing plants.
As inputs are local, credit is provided to exporters in Naira — through participating banks.
The applicable interest rate differs.
Where the funds are to be used for working capital purposes, a 1 year repayment period applies. On the other hand, project-related funds can be repaid over a 3-year period.
At its discretion — NEXIM may offer businesses a moratorium period.
Nigerian Creative Arts and Entertainment Industry Loans
NEXIM has designed a funding program targeted at the creative and entertainment sector. This scheme, its goal is to ensure businesses in the creative/entertainment industry have access to the financing they need — to grow and develop.
As well as the growth of the creative/entertainment sector, with this fund, NEXIM seeks to improve the quality of services provided, generate jobs, create wealth, attract capital investment and broaden Nigeria's export basket — through the export of intellectual property and services.
Any registered business can benefit from this facility, provided it operates in the creative and entertainment industry. Examples include fashion, film, music, radio and television-related activities.
Interest rates vary. Loans can be advanced for up to 7 years. Incubation or moratorium periods can also be approved.
Small and Medium Enterprise Export Facility (SMEEF)
Export-orientated small and medium-sized enterprises (SMEs) may be able to get funding through this export facility.
The aim of SMEEF is to support the non-oil export value chain through industrialization and the subsequent production of value-added goods — for export.
The mechanization of processes involved in the production of goods for export will considerably boost productivity and make Nigerian products more attractive — on the international market. In doing so, an increase in foreign exchange reserves is likely to be seen.
To be eligible, business activities must relate to the export of goods — wholly or partly made in Nigeria. Accordingly, financing is not just limited to working capital requirements but also the import of goods that will facilitate export (e.g. foreign machinery and raw materials).
Exports of viable services consultancy, event planning, hospitality, tourism and transport — can also be considered.
Project financing has a maximum loan tenor of 7 years, while for working capital — a loan tenor of 1 year applies. A moratorium of up to 2 years may be offered, and interest rates are set at 9%.
Stocking Facility (SF)
NEXIM's Stocking Facility is specifically designed to help manufacturers with the working capital needed — to stock local raw materials. Raw materials that are typically seasonal in nature need to be stocked in advance to achieve the optimum level of production throughout the year.
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SF is an interbank facility — made available to exporters in local currency, i.e. Naira. Credit is advanced for a maximum period of 12 months. Interest rates are set at around 14-17%.
Women and Youth Export Facility (WAYEF)
NEXIM has established the Women and Youth Export Facility to support both women and youth involved in the non-oil export value chain.
With this scheme, NEXIM hopes to increase the access to credit that these groups have and, by doing so — facilitate national industrialization for valued added exports. In the process, jobs and wealth are likely to be created, with the added bonus of the economy diversifying away from oil and gas.
Women and youths between the ages of 18-35 are eligible — for this scheme. Participants may include co-operatives, non-governmental organizations, trade associations or registered businesses.
A maximum of N50 million can be borrowed, and any monies advanced — will not exceed 80% of the total project or transaction cost. Loans are extended for a maximum of 12 months, with a possible moratorium period. The applicable interest rate is 9%.
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Export Development Facility (EDF)
The Export Development Facility (EDF) has been introduced by NEXIM following a CBN investment of N50 billion. It is designed to stimulate and increase funding, particularly for SMEs, in the export sector.
The non-oil export value chain is the primary focus, as the fund seeks to broaden Nigeria's export basket.
Exporters need to have commercially viable projects and established relationships with foreign buyers. Exportable products also need to have a local value added — of at least 50%.
Up to 60% of the total project or transaction cost can be financed. Loan tenors for project financing are capped at 9 years, while working capital loans — are to be repaid within a year. A moratorium period is available, and interest rates are capped at 9%.
Nigeria-Africa Trade and Investment Promotion Program (NATIPP)
The Nigeria-Africa Trade and Investment Promotion Program is a joint program of the African Export-Import Bank (Afreximbank), NEXIM and the Nigerian Export Promotion Council (NEPC).
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With NATIPP, Afreximbank will work with NEXIM and NEPC to identify, prepare and assess trade transactions and projects; explore co-financing and risk-sharing opportunities; and share knowledge.
Particular importance will be placed on intra-African trade matters via technical collaboration, employee exchange, research and joint events.
This initiative comes on the back of the signing of the African Continental Free Trade Area (AFCFTA) agreement.
Eligible business transactions and activities include:
- Export-orientated projects promoted by Nigerian organizations
- Transactions supporting investment — in Nigerian manufacturing and subsequent export to other African countries
- Transactions that support capital and investment flows — between Nigeria and Africa
- Projects sponsored by Nigerian companies — in other African countries
- Transactions that support the exchange of goods and services — between Nigeria and the diaspora
Rediscounting and Refinancing Facility (RRF)
The RRF has the aim of encouraging and supporting commercial banks to provide cheaper pre- and post-shipment finance — in support of exports. The mechanism for delivery is providing a discount window — at which export bills can be refinanced.
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The facility is made available for a maximum period of 1 year. Export bills and transactions shall be discounted or refinanced at a rate of 6% per annum.
NEXIM currently has an N50 billion RRF window — given to it by the CBN.
Risk bearing facilities
Export Credit Guarantee Facility
Lack of funds is a major obstacle for exporters. Commercial banks are often unwilling to lend for export transactions, especially at the pre-shipment stage, due to the relatively high risk of default.
Through this Export Credit Guarantee Facility, banks are protected against the risks of late payment and default. Businesses also benefit through being granted a credit facility that would not have been possible — without a NEXIM guarantee.
As well as commodities and services, eligible goods are those wholly or partly manufactured in Nigeria. Only export-orientated transactions can be guaranteed.
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Here, both the pre-shipment and post-shipment aspects of export are covered by NEXIM.
Export Credit Insurance Facility
One of the risks of export is buyers not paying for goods or services received. Non-payment may come as a result of a variety of reasons outside an exporter's control, such as a buyer going bankrupt.
NEXIM's Export Credit Insurance Facility is designed to protect Nigerian exporters against the risks of non-payment — for goods and services rendered (in advance of being paid).
The export of commodities, services and goods manufactured in Nigeria — can be covered by this facility.
Both pre-shipment and post-shipment risks are covered. For example, the cancellation of an export license, insolvency of a buyer and other economic/political risks.
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Qualifying for a Nigerian Export-Import Bank loan
All companies involved in export-related activities are eligible for a loan from NEXIM. The main requirements are that any activity that NEXIM is to fund should lead to an export of goods or services.
For example, if your business needs to import engines to manufacture goods for export — NEXIM may be able to help.
In most cases, NEXIM cannot directly finance individuals. As a result, you are required to have a registered business or company — with the Corporate Affairs Commission (CAC).
NEXIM can lend to companies directly. However, NEXIM also finances businesses via intermediaries or participating banks. These banks may also have their own lending criteria in addition to that of NEXIM.
How to apply for a Nigerian Export-Import Bank loan
Companies interested in applying for a NEXIM loan would need to apply either directly to NEXIM or apply through a commercial bank. Either way, you will need to make an application in person — at an appropriate branch.
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The process for applying for a NEXIM loan is similar, regardless of if you are applying directly through NEXIM or not.
Before making an application, you may wish to discuss your requirements with the staff at the bank. They should be able to provide you with more details as to which credit facility best suits your needs.
You will be given an application form to complete. This application form will help evaluate the eligibility of the project you to seek financing for. In it, you will be asked to provide information on your business and the project at hand.
So, details of the amount of money required, the purpose of the loan, the location of the project and more.
Once you submit the form, an assessment will be made — as to your business's suitability for financing. If the outcome is favourable, funds may be released to you — as per the terms of the resulting approval letter.
Please note — there is a non-refundable application fee that may apply.
A checklist of what is required before a loan is approved could include the following:
- Completed application form
- Company profile
- Project feasibility study or business plan
- Projected cash flow
- Bank statements (12 months)
- Audited financial accounts
- Tax clearance certificate
- Certificate of Incorporation
- Proof of registration with the Nigerian Export Promotion Council (NEPC)
- Valid means of identification (driving license, passport, voters card)
- Proof of address
- Details of collateral offered (if any)
Frequently asked questions (FAQs)
How long will it take before receive funds from the Nigerian Export-Import Bank?
After the submission of an application, processing and approval may take between 4 – 12 weeks. Where larger funds are involved, applications tend to take longer. In all cases, the timely submission of requested documentation — will aid in speeding up the process.
Does the Nigerian Export-Import Bank finance imports?
Yes, NEXIM does finance the imports of capital equipment, raw materials and other components — that shall be used to make goods for export purposes.
What is the interest rate charged on a Nigerian Export-Import Bank loan?
The interest rates charged are linked to the loan facility in question. Interest rates can be as low as 6% and can go beyond 17%. Apart from the interest charges — there may be commitment, administrative and legal fees to pay.
Does the Nigerian Export-Import Bank give grants?
NEXIM does not normally give grants. But, one of their partner organizations, the Nigerian Export Promotion Council (NEPC), does.
Does the Nigerian Export-Import Bank finance startups?
Yes, NEXIM can fund startups. Generally, for startups, the amount that can initially be borrowed — is limited.
Does the Nigerian Export-Import Bank require collateral?
Yes, usually, NEXIM does require collateral. Acceptable forms of collateral may include:
- Obligations of the Federal Government of Nigeria (FGN Bonds, FGN Eurobonds, FGN Treasury Bills etc.)
- Obligations of state governments or agencies of the Federal Government of Nigeria
- Other non-government debt instruments
- Physical assets, e.g. real property
- Third-party guarantors (or collateral)