NEXIM Bank partners other agencies to promote MSMEs

06 Aug 2019
Financial Nigeria


Over the last one year, the Bank has approved applications worth N55 billion and disbursed about N24 billion to exporters, many of whom are SMEs.

Abba Bello, Managing Director/CEO, Nigerian Export-Import Bank, presents an award at the second edition of National MSME Award

The Nigerian Export-Import Bank (NEXIM) was one of the key partners of the second edition of the National MSME Award, which took place on Thursday, 1st August, 2019.

Recall that the National MSME Award is an offshoot of the Nationwide MSME Clinic, which was launched in 2017 by the Office of the Vice President and conceived as a platform to bring together all relevant Federal Ministries, Department and Agencies (MDAs) to address the challenges faced by small and medium-scale enterprises (SMEs). The aim of the initiative is to enhance the contribution of SMEs to national development. It is also one of the key initiatives of the administration of President Muhammadu Buhari, under the Economic Recovery & Growth Plan (ERGP) aimed at achieving sustainable and inclusive growth through economic diversification, jobs creation and poverty eradication.

Since the commencement of the MSME clinics, NEXIM has participated in all the programmes, which have been held so far in 22 states of the Federation, including the Federal Capital Territory. The Bank has also collaborated towards the establishment of One-Stop Shops, designed to attend to enquiries of MSMEs on an on-going basis, in addition to contributing to the establishment of Common Facility Centres, where SMEs could have access to modern machinery and equipment, thereby helping them to upscale and enhance the value of their products.

NEXIM, being a major partner, was the sponsor of the prize for the Most Outstanding Female MSME Clinic Partner in 2019. This was one of the Star Prizes for the second edition of the Award Programme. Last year, the Bank sponsored the prize for the best MSME in the Agricultural Sector.  

Being an Agency of government, which prides itself as the Trade Policy Bank of Nigeria, NEXIM offers credit and risk-bearing services to support non-oil exports from Nigeria, thereby helping to diversify the economy from crude oil exports. The Bank is also partnering with the Central Bank of Nigeria (CBN) to manage the Export Development Fund (EDF) and the Non-oil Export Stimulation Facility (NESF), established by the Apex Bank to mitigate the funding gap in the non-oil export sector. NEXIM is also collaborating with the African Export-Import Bank (Afreximbank) to implement the Nigerian African Trade and Investment Promotion Programme (NATIPP). Afreximbank has earmarked $1 billion for the programme to support export and investment activities of Nigerian entrepreneurs in other African Countries.

Over the last one year, the Bank has approved applications worth N55 billion and disbursed about N24 billion to exporters, many of whom are SMEs.

Key initiatives of NEXIM aimed at supporting and promoting the MSME sector

Following NEXIM’s participation at the MSME Clinics and given the Bank’s deeper insights into the operations of small businesses, the Bank has developed a number of initiatives towards promoting the sector and enhancing its contribution to export trade. They are as follows:

a.    State Export Development Programme

One of such initiatives is the State Export Development Programme (SEDP), which is an intervention scheme specifically designed to catalyse and incentivise regional export investments and promote diversification and industrialisation, based on the economic potentials and resource endowments in every state of the federation.  It is specifically targeted at developing and supporting the SMEs, including start-ups in furtherance of the government’s objective under the ERGP. The scheme is designed as a partnership arrangement with the State Governments, whereby suitable projects will be identified in collaboration with NEXIM for business advisory services and funding. The beneficiaries of the funds are, however, businesses from the private sector, while government’s role is to provide enabling environment. Under this scheme, at least N1 billion has been earmarked for each state of the federation from the EDF.

b.    Anchor Exporter Programme

The Bank has also developed an Anchor Exporter Programme (AEP), which is akin to the Anchor Borrower Programme for the Agricultural Sector, but targeted at export-oriented businesses. NEXIM’s intervention is targeted at the entire value chain, from production to export of products and is designed to incorporate aggregators, who will create market access for the SMEs. Under this scheme, NEXIM has also signed a Memorandum of Understanding (MOU) with the Nigerian Incentive Risk-Based System for Agricultural Lending (NIRSAL), towards providing risk-mitigating instruments (guarantees/insurance) to facilitate access by SMEs.
c. Intervention Scheme for Women & Youth

As part of NEXIM’s contribution to the achievement of the Sustainable Development Goals (SDGs), the Bank has also earmarked about N3 billion to support industries that are major employers of women and youth under a special economic empowerment scheme for the vulnerable groups. This fund will be provided at highly concessionary rate and the key objective will be promotion of women and youth empowerment.

d. SME Rating Agency of Nigeria (SMERAN)

Another key initiative is the Small and Medium Enterprises Rating Agency of Nigeria (SMERAN), which was conceived as a specialized institution to develop and implement a rating mechanism for the SMEs in Nigeria. The rating agency will help to generate requisite business information to improve the operations of the sector and boost access to funds. It is a collaborative arrangement between government agencies, including the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN), Bank of Industry (BOI), the Nigerian Export-Import Bank (NEXIM) and Dun & Bradstreet (D&B), who have been working together and signed an MOU in October 2017 to unveil the scheme. This scheme is designed to address the issue of information asymmetry and the limited access of SMEs to funds. The collaborating parties are currently working to fine-tune the modalities towards commencement of operations.

e. Promoting Factoring

NEXIM – in partnership with key stakeholders under the auspices of the Nigerian Factoring Working Group, which includes the CBN Financial System Strategy (FSS 2020), and other institutions – is also promoting the introduction of factoring as a trade finance instrument and an MSME development and financial inclusion strategy in Nigeria. Towards this objective and as part of efforts to institute a regulatory/legal framework, a draft Factoring Bill for Nigeria has been developed. The Bill passed the first and second readings at the 8th National Assembly, while the public hearing was conducted by the House of Representatives. Consultations and engagement are on-going towards ensuring the early passage of the Bill by the National assembly.

Going forward

With the signing of the African Continental Free Trade Agreement (AfCFTA) by Nigeria, NEXIM has doubled its steps towards deepening regional trade, through which it seeks to create more opportunities for MSMEs and integrate the informal traders into the formal sector.

Having recognized that more of Nigeria’s manufactured products are traded in the regional market, NEXIM, a few years ago, launched the ECOWAS Trade Support Facility (ETSF) to boost SMEs access to funds, increase formal trade and improve the payment system.  The Bank also spearheaded the decision to establish the Sealink Project to improve transport and logistics support for regional trade.

As a strategic objective, the Bank seeks to grow its intervention in the regional market to about 60% of its portfolio in furtherance of the Nigerian Industrial Revolution Master Plan (NIRP), which seeks to make Nigeria the production hub of light manufacturing in the region.

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