The Nigerian Export-Import Bank, NEXIM, and the Bank of Industry, BOI, on Tuesday received about $700 million (N105 billion) credit to support small and medium enterprises.
The sovereign-guaranteed multi-tranche lines of credits, LoCs, was received from the African Development Bank, AfDB, to support export-oriented small and medium enterprises, SMEs, as well as their modernisation and expansion activities.
NEXIM was given $200 million (N30 billion) facility, while BOI received $500 million (N75 billion) to enhance the capacity of local SMEs to be more competitive, boost their operations, and ultimately help create more jobs for the teeming population of unemployed Nigerian youth.
BOI is a catalyst for industrial development in Nigeria and one of the oldest development finance institutions in Africa, while NEXIM is Nigeria’s national export credit agency established by Act 38 of 1991 with a mandate to provide export credit, export guarantee and export credit insurance as well as export advisory services to export oriented companies, particularly SMEs in the non-oil sector.
Since 1964, when it was established, BOI has provided term finance and advisory services primarily to indigenous SMEs, to which about 85 per cent of its resources is committed.
The component part of the LoCs include a technical assistance package to strengthen institutional capacity at both BOI and NEXIM as well as at their SME clients levels.
NEXIM Managing Director, Roberts Orya, said at the signing of the memorandum of understanding, MOU, in Abuja that the AfDB has been supporting Nigeria’s efforts towards a more diversified economy away from oil and gas through the provision of integrated financing package to SMEs.
According to Mr. Orya, the LoCs would supply multi-sector financing to address the challenges that SMEs face in accessing finance in the country, adding that the facility would help export-oriented SMEs become more competitive, ensure sustainable growth of their operations and generate employment in the productive sectors of the economy.
The Managing Director of BOI, Evelyn Oputu, said the AfDB’s operation has contributed to capital market development and government revenue, adding that this is likely to generate significant additional lending to export-oriented SMEs at a time when it is sometimes difficult for commercial banks to finance this important sector of the Nigerian economy.
Ousmane Dore, AfDB’s Resident Representative in Nigeria said the Bank’s combined programme would “contribute to mobilise significant financial resources for Nigerian export-oriented SMEs, ultimately contributing to economic development, employment opportunities, foreign exchange and regional trade integration.”
Pledging AfDB’s support through the programme, NEXIM seeks important economic development achievements, including approximately 55,000 new jobs for its SME clients, $1.6 billion (N240 billion) in foreign exchange and an overall contribution of almost 7 per cent to non-oil exports, including a 10 per cent share in Economic Community Of West African States, ECOWAS, exports.
The AfDB initiative has provided a great opportunity for NEXIM to make available concessional long-term funding in pursuance of its strategic objectives of enhancing value-added exports and bolstering the capacity of SMEs for job creation and foreign exchange earnings.
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