Under the EXPORT Trade Support Facility, NEXIM would grant short, medium and long term fixed rate loans in local currency, to participating banks on behalf of their export clients.
The main objective of the facility is to provide medium/long-term finance in local currency to exporters through licensed banks for the following purposes:.
- Setting up of new export projects.
- Revitalisation, acquisition of additional assets for modernisation, and/or expansion of existing production units for exports.
- Acquisition, rehabilitation and/or expansion of plantations/farms for the production and processing of exportable products.
- Acquisition of spare parts and packaging materials for the manufacture of exportable products.
- Any other activity that may be acceptable to NEXIM.
A bank seeking to benefit from the facility shall be of good financial health as evidenced by its audited accounts for the preceding three years, current market information, and meet criteria set by NEXIM from time to time.
For exporters to be eligible they must satisfy the following:
- Be duly incorporated/registered in Nigeria as limited liability companies or cooperative societies (manufacturing, trading or service companies)
- Be existing production units with a minimum of 50% export orientation evidenced by previous and existing export orders or any other evidence acceptable to NEXIM, or
- Be new units with a minimum of 50% export orientation evidenced by export commitment(s) or any other evidence acceptable to NEXIM
All PB’s are expected to fully secure their lending. The types of security acceptable to NEXIM shall include but not limited to the following:
- Promissory Notes/Irrevocable Standing Orders for the amount of the facility suitably drawn.
- Fixed and/or floating charge over all assets of the project and/or promoter’s landed properties with NEXIM’s interest noted..
- A lien over the proceeds of the export transactions financed with NEXIM’s interest noted.
- Marketable financial instruments.
In exporter seeking to benefit from the facility shall apply to his bank. The PB shall appraise the application in line with its existing lending rules. On approval of the application, the PB forwards a formal loan request to the Managing Director/Chief Executive of NEXIM duly signed by two authorized signatories and supported by the underlisted documents:
- Certified True Copy of Certificate of Incorporation
- Exporter’s Audited Statement of Accounts for the past three years (where applicable).
- Feasibility Study Report for a new project or a Project Brief for an on-going concern.
- Certified True Copies of Forms CO2 and CO7.
- True Copy of Proforma Invoice(s) for new/used equipment from a reputable supplier(s).
- Evidence of Licences/Permits from relevant Agencies, where applicable.
- Evidence of export commitment or any other arrangement acceptable to NEXIM.
- Copy of Environmental Impact Assessment Report, where applicable.
- Any other document that may be required by NEXIM.
NEXIM shall charge interest at rates to be determined from time to time. Where a default arises a default interest rate shall be charged on the facility or due installments for the period of the default
Interest payments shall be made on a semi-annual basis in arrears on outstanding balances commencing within six-months from the date of first disbursement. Subsequent payments shall be made on the installment dates of loan balances.
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 first disbursement or as may be determined at the time of disbursement. Subsequent payments shall be made on the installment dates of loan balances.
- 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 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, 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.
- NEXIM shall disburse approved funds upon fulfillment of all conditions precedent to draw down;
- For approvals that involve importation, NEXIM shall establish the Letter of Credit for the transaction;
- In the case of importation of equipment, NEXIM reserves the right to do witness testing or engage the services of a consultant to do so on its behalf, at the expense of the beneficiary project, before shipment; and
- For locally sourced items, disbursement shall be made directly to the supplier of the item.
NEXIM may consider repayment terms of up to three (3) years from the date of initial disbursement for project related financing. For short-term facilities, repayment terms shall be a maximum of 365 days, while repayments for letters of credit confirmation/refinancing shall be a maximum of 360 days.For project related financing, payments will normally be made in a set number of equal and consecutive installments typically within six months from the expiration date of the moratorium period. After the moratorium period, installments of loan principal and repayments of interest would be synchronized.
All principal repayments shall be in the currency of disbursement and in accordance with the repayment schedule established at the time the loan is granted.In case of default on any facility or due loan instalments,
NEXIM shall charge a penal rate of 4% p.a. for short term facilities and 1% p.a. for medium and long term facilities, above the rate at which the initial loan was given and for the period of the default. All payments received shall be applied to defray interest charges first before application to principal amounts outstanding.
- NEXIM may request for an acceptable technical report or warranty on the equipment acquired by exporters;
- No new equipment should be purchased with the proceeds of this facility from sources other than the manufacturers or major/accredited distributors;
- Where discrepancies are noticed between information provided on the Proforma-Invoice and what is physically delivered, NEXIM shall review the entire transaction and may recall the facility immediately;
- NEXIM shall on an annual basis set limits for borrowers;
- Where necessary an extension of the tenor of the facility or due loan installments may be granted;
- Where the funds are used for purposes other than for which they were granted, or other forms of abuse such as false declaration etc, NEXIM shall immediately recall, and written report will be made to the Central Bank of Nigeria accordingly;
NEXIM shall monitor the utilisation of funds disbursed;
- NEXIM shall undertake regular project visits to ensure adherence to the conditions of the loan;
- Where applicable, NEXIM shall require the domiciliation of export proceeds by the exporter; and
- For loans with tenure of five years and above, NEXIM shall be represented on the Board of the Company throughout the duration of loan.