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The
Nigerian Export-Import Bank (MEXIM) says it is considering a credit
guarantee scheme for local small-scale industrialists. This is to
ameliorate the difficulties they encounter in securing credit
facilities from commercial financial institutions for their operations
and products exports.

The
bank’s managing director, Robert Orya, told NEXT in Abuja yesterday
that Export Credit Agency (ECA), which is mandated to provide risk
bearing and credit facilities in support of the country’s non-oil
export trade, is already in talks with top officials of the Nigerian
Association of Small Scale Industrialists (NASSI) to explore prospects
of developing a memorandum of understanding (MoU) for mutual support,
particularly as it concerns exportable goods, export and import
financing, capacity building, and strengthening of strategic alliances.

“We
hope to explore all avenues to build and strengthen the capacity of
small-scale industrialists and other categories of businesses by
guaranteeing credits to those that lack the requisite collateral to
secure loans from DFIs.

“But
the support would come only after the prospective beneficiary has met
all the requirements set by the Central Bank of Nigeria (CBN) for such
facilities,” Mr. Orya said.

Succour to industrialists

According
to Mr. Orya, a recent meeting with the NASSI officials had revealed
that most small-scale industrialists who neither have technical
capacity nor the requisite collateral to obtain loans and other
facilities from Development Financial Institutions (DFIs) often end up
being frustrated out of business, in total negation of government
objective to boost the country’s Small and Medium-scale Enterprises
(SMEs).

NASSI
president, Chuku Wachuku, said recently that problems often encountered
by manufacturers of exportable products in the country are usually
associated with the dearth of export incentives, lack of export-related
loan facilities to enhance the capacity to produce for exports, to earn
foreign exchange for the country, as well as absence of credits for the
acquisition of relevant machineries to manufacture value-added export
products.

Other
problems include the difficulty in establishing Letters of Credits
(LCs) to facilitate international trades, inability to enter into
bilateral and multilateral agreements for cross-border deals with
small-scale industrialists in other countries, and difficulties in
creating windows for the collateralisation of loans on special
facilities granted to industrialists.

But
the NEXIM boss, who described small-scale industrialists as the engines
of the private sector as well as catalysts for Nigeria’s economic
growth towards achieving the Vision 20:2020 goals, said the bank is
ready to commit its resources into any activity that would help achieve
its mission through the diversification of export-oriented investments
in the manufacturing, agriculture, solid minerals, and services
sub-sectors of the economy.

Acknowledging
the relationship between NEXIM’s mandate and that of NASSI,
particularly regarding the development of SMEs as well as facilitating
more investments in the identified sectors, Mr. Orya said that the
provision of adequate funding for export-induced value-added activities
for small scale industries would boost government’s effort in this
direction.

He
also said strengthening the Start-Your-Own-Business (SYOB) programme,
NEXIM’s self-employment initiative in partnership with the National
Directorate of Employment (NDE) for unemployed graduates and retirees,
would help in checking the high rate of unemployment in the country,
while NEXIM/NEXPORTRADE House Limited (NHL), a public-private
partnership initiative, would facilitate formal cross-border trade and
investments among member states of the Economic Community of West
African States (ECOWAS) and other African countries.

“NEXIM
has always supported SME start-up/green fields projects in various
sub-sectors of the economy, most of which have grown to be amongst
CBN’s top 100 exporters.

“From
inception in 1991 to date, we have intervened in the major sectors of
the economy, by disbursing over N60 billion and $273 million through 52
participating banks to over 400 beneficiaries, including 150 industrial
projects, in the manufacturing, agriculture/agro-allied, solid
minerals, oil & gas, and services sectors. Also, the bank has over
the years purveyed funding,” Mr. Orya said.