The Nigeria Export-Import Bank has reopened its Loan Application portal for new applicants (Nigeria Exporters) who wish to apply for loans as we will be walking you through how to apply in this article, so keep reading.
The Nigerian Export-Import Bank (NEXIM) was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50, 000,000,000 (Fifty Billion Naira) held equally by the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria.
Direct Lending Facility
Under the Direct Lending Facility, NEXIM would grant short, medium, and long-term fixed or floating rate loans, to exporters directly and/or under co-financing/syndication arrangements with eligible banks.
Direct loans are available to assist exporters to complete their export sales, by providing working capital and/or facilities and funds for the procurement of equipment. Services include but are not limited to consultancy, tourism, and oil and gas services provided by Nigerians. Loans are granted directly to a Nigerian exporter in both local and foreign currencies for up to 80% of the total project cost.
Items Not Eligible For Financing
- Armaments, ammunition, and other military equipment:
- Psychotropic drugs and narcotic
- All items prohibited by international conventions or environmental constraints
- Pornographic and obscene materials; and
- Items prohibited for importation/exportation by prevailing government policies/guidelines
Banks wishing to participate in co-financing a project with NEXIM must be in good financial health as evidenced by three years of Audited Accounts and meet additional criteria set by NEXIM from time to time. Where NEXIM is invited to join a syndication arrangement, member banks must be ready to provide the working capital requirement of the borrower and subsequent cost overrun.
A borrower must be a creditworthy limited liability company, cooperative society, existing/new production units with a minimum of 50% export orientation, or an existing provider of export services. The borrower must establish that the loan will develop or expand his export business.
The security may be one or more of the following:
- Bank guarantee or insurance bond
- Landed property belonging to the borrower/directors of the company in a location acceptable to NEXIM;
- A first lien or fixed charge on machinery and equipment of the borrower;
- Share certificates of quoted companies acceptable to NEXIM;
- Investment certificates or commercial bills acceptable to NEXIM; and
- Floating charge on moveable property of the borrower or directors of the company.
The following documents should accompany the application
- A certified true copy of Certificate of Incorporation;
- Three years audited statement of accounts or a complete set of management reports signed by two directors of the company for the accounting period for which their audited statement of account is not available;
- A feasibility study report/business plan;
- Certified true copies of forms CO2 and CO7;
- Certified true copies of proforma invoice(s) for new/used equipment from a reputable supplier(s);
- Evidence of license/permit from relevant agencies where applicable;
- Evidence of export commitment or any other arrangement acceptable to NEXIM;
- Copy of Environmental Impact Assessment Report;
- Evidence of availability of counterpart funding (for new projects);
- Copies of the title of documents that are available as security; and
- Any other document that may be required.
For project-related financing, interest payments shall be made in the currency of disbursement and on a semi-annual basis in arrears on outstanding balances commencing within six months from the date of the first disbursement or as may be determined at the time of disbursement. Subsequent payments shall be made on the installment dates of loan balances.
Fees & Charges
- Commitment fee: A commitment fee of 0.5% p.a. shall be charged on the undisbursed balance of a direct loan. This fee begins to accrue 60 days after loan signature and shall be synchronized with interest payments;
- Administrative fee: A once-only fee of 1.0% flat shall be charged calculated on the loan amount and payable on acceptance of the loan offer. For short-term facilities of less than 180 days, the fee shall be 0.5% flat.
- Legal fee: Where the service of external legal counsel is used in the preparation of loan documents, the borrower will be required to pay the legal fees of 0.5% calculated on the loan amount;
- Others: The borrower would be obliged to pay the charges with respect to monitoring visits, stamp duty, other duties, or taxes payable in relation to the loan.