NEXIM Bank’s new Women and Youth Export Facility
The Women and Youth Export Facility is one of NEXIM Bank’s initiative towards implementing the strategic pillar of social and economic inclusion of the federal government.
In this interview with Financial Nigeria Editors, Stella Okotete, Executive Director, Business Development, Nigerian Export-Import Bank (NEXIM Bank) shares information on the new facility of the bank for women and youth, and how the bank is promoting inclusive economic opportunities in Nigeria.
Financial Nigeria Editors (FNE): The Nigerian Export-Import Bank recently launched the Women and Youth Export Facility (WAYEF). What is the rationale for creating the facility?
Stella Okotete (SO): As you are aware, NEXIM Bank is an Export Credit Agency and the Trade Policy Bank of Nigeria. In this regard, our intervention is guided by the economic and trade policy of the federal government. You would also recall that one of the key pillars of President Muhammadu Buhari’s administration, under the Economic Recovery & Growth Plan is to achieve social inclusion, such that every citizen has the opportunity to work and live a decent life. Central to this objective is the need to reduce unemployment and create more opportunities for the women. This product is, therefore, one of NEXIM Bank’s initiative towards implementing the strategic pillar of social and economic inclusion.
Let me emphasise that over the years NEXIM Bank has intervened significantly in key non-oil sectors that are high employers of women and youth such as Shea, Cashew, Hibiscus, Ginger, etc, where women & youth are involved in cleaning and packaging of products for export. We have, however, observed that by providing access to finance and other capacity building initiatives, these groups of people can own their own businesses and contribute more directly to the job creation efforts and economic diversification objectives of the federal government of Nigeria.
WAYEF is also part of our own affirmative action and NEXIM Bank’s contribution towards achieving goal 5 of the United Nations Sustainable Development Goals (SDGs), which seeks to achieve gender equality and empower all women and girls.
FNE: What are the key attributes of the facility?
SO: The product has been designed to improve access to finance for women and youth. To achieve this, we have established a dedicated desk, whose target is to increase the number of women/youth-owned businesses in our portfolio. This desk is also responsible for identifying and promoting necessary collaborations and synergy with other MDAs and indeed other organisations that could provide support for women and youth entrepreneurs, either in terms of capacity building or enhancing market access.
It may interest you to know that besides Nigerian institutions like the Nigerian Export Promotion Council (NEPC) and the Small and Medium Enterprises Develop-ment Agency of Nigeria (SMEDAN), international organisations and develop-ment partners like the United Nations Industrial Development Organisation (UNIDO), United States Agency for International Development (USAID) and the World Trade Organisation (WTO) have programmes to support women and youth entrepreneurs.
Now speaking more specifically about the attributes, the product offers more favourable pricing to the target beneficiaries, with lower application fee and single digit interest rate. The collateral require-ment is also more flexible and includes moveable assets that are registered in the collateral registry. You see, our women in particular, have a lot of investments in personal assets, such as jewelry, which are lying idle. Such assets could be leveraged to unlock capital for further empowerment and wealth creation.
FNE: How does the WAYEF complement the existing portfolio of financing products and services of NEXIM Bank?
SO: As an institution, our products and services are targeted at the critical sectors that are key drivers of export growth such as Manufacturing, Agriculture, Solid Minerals and Services, our MASS Programme. WAYEF will still focus on these sectors, but with the condition that the projects are those promoted by women and youth. As I mentioned earlier, majority of the labour force engaged in processing and packaging of agricultural commodities are women and youth, but we now want them to own their businesses.
Let me observe that many players in this target group are already engaged in cross border trade, but they do this more informally. WAYEF is also targeted at bringing more of these traders into the formal sector, so that they can benefit from government’s incentives and grow their businesses, particularly within the context of the opportunities provided by the African Continental Free Trade Area (AfCFTA), which commenced in January, 2021.
As part of measures to increase access to funds under this scheme, particularly for SME exporters, we have also launched a Project Preparation Fund in collaboration with Afeximbank. Under the Afreximbank-NEXIM Bank partnership, we seek to raise up to $50 million towards engaging consultants for the preparation of feasibility reports and meeting other requirements needed to present bankable proposals. We expect that many of our women and youth will seize the opportunity and benefit from the various initiatives.
FNE: The COVID-19 pandemic has been known to have more economic impact on women. What are the necessary institu-tional measures that can ensure the pandemic does not leave a lasting negative gender impact on Nigerian women?
SO: Yes, the pandemic has had more economic impact on women than men. In a report published in July, 2020, by Mckinsey and Company, a global research firm, it was observed that women’s jobs were 1.8 times more vulnerable to the crisis than men’s jobs. One reason for this is that the pandemic increased the burden of unpaid care, which is carried more by women.
In Nigeria and indeed most African countries, women are more engaged in informal, sometimes daily paid activities, which require physical contact and were therefore more affected by social distancing and restriction of movement. In some instances, some of the businesses operate from home and were therefore more prone to distractions during the lockdowns, partly because of the need to spend more time to cater for family members.
The foregoing further underscores the need for a dedicated funding programme to support women businesses, which is what WAYEF does. As I earlier mentioned, one of the key objectives of WAYEF is to encourage women to operate formal business, with proper corporate structures and the ability to leverage technology like large businesses. For example, women owned businesses should be able to sell their goods and services on the internet and use dispatch services to deliver products. As you are aware, businesses are now talking about the Fourth Industrial Revolution, which will increasingly rely on the use of smart technology to gain competitive advantage. WAYEF seeks to position our women to integrate into the global economy.
FNE: NEXIM Bank has been intervening in the manufacturing, agro-processing, solid minerals, and services sectors. These are sectors that can create jobs for the youth. How does the bank define “youth” for the purpose of accessing this new fund?
SO: Our definition of youth aligns with that of the federal government under the Nigerian Youth Employment Action Plan, which was developed by the Federal Ministry of Youth and Sports Development (FMYSD). The plan defines youth as young people between the ages of 18 and 35 years. As you may be aware, the Federal Executive Council, on July 2020, approved the establishment of the N75 billion Nigerian Youth Investment Fund (N-YIF) operated by the Central Bank of Nigeria (CBN). This fund seeks to provide the needed funding support to assist youth-owned businesses towards bridging the employment gap and to develop the managerial skills of Nigerian youth.
NEXIM Bank’s focus on the youth is in line with the government’s objectives under the N-YIF. As you would have observed, recent report from the Nigerian Bureau of Statistics indicates that unemployment rate has reached 33.3% and youth unemployment at 42.5%. Therefore, for us in NEXIM Bank, having observed that youth operate a lot of businesses in the value chains across the MASS sectors, we thought it necessary to give more focus to this population segment as part of our contributions to addressing youth unemployment, towards curbing youth restiveness and other security challenges.
FNE: Are there additional impacts the fund is planned to have?
SO: Yes, WAYEF is a financial inclusion strategy. You see, the United Nations’ population projection for Nigeria in 2020 indicates that about 62% of Nigerians are below 25 years, while over 50% belong to the female gender. These segments of the population can therefore not be ignored, hence the need for deliberate and targeted policy measures to address their needs.
Through WAYEF, we seek to have more women- and youth-owned businesses in our portfolio – as already mentioned – as part of measures to increase employment generation and foreign exchange earnings. This will also promote sustainable economic development in line with the objectives of the Federal Government of Nigeria.
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