In the effort of the Apex bank to diversify the Nigerian economy away from oil and to hasten the growth of non oil export sector. The CBN launched the N500 billion Non oil Export Stimulation Facility (ESF) in June 2016.

Parties to the fund
Central Bank of Nigerian (CBN): The investor, invested N500 billion in a debenture issued by NEXIM for the purpose of funding non oil export; it determines the lending limit and applicable rates;. It also reviews the operating guideline as may be deemed fit.
Nigerian Export and Import Bank (NEXIM): The managing agent of the fund, in charge of day to day management and administration of the fund and renders periodic returns to CBN
Participating Financial Institutions (PFI): Deposit Money Bank and Development Finance Institution in charge of liaising directly with interested customers and reviewing and appraising applicants eligibility who then forwards eligible application to NEXIM for disbursement

The aim of the fund is to
1. To provide concessionary finance to non oil exporters
2. To provide long term fund at single digit interest rates to non oil exporters.
3. To aid non oil export productivity and create more jobs
4. Expand the diversification of Nigerian economy in the non-oil export sector.
5. Boost contribution of non-oil exports for sustainable economic development.
6. Increasing Foreign Exchange earnings.
7. Broading the scope of export financing instrument

Eligible Transactions
Only an export oriented company registered in Nigeria with verifiable export off take contract agreement with an importer oversea will be eligible. The company must have satisfactory credit report. An AMCOM debtor may also be eligible only with special clearance of the CBN.
1. Exporter of goods wholly or partly processed or manufactured in Nigeria
2. Exporter of commodities and services, which are permissible and excluded under the export prohibition list.
3. Importer of plant and machinery, spare parts and packaging materials required for export oriented production that cannot be produced locally
4. Exporter of value chain support services such as transportation, warehousing and quality and quality assurance infrastructure.
5. Resuscitation, expansion, modernization and technology upgrade of non oil export industry
6. Stock facility/ Working capital

Categories of Finance Under ESF
1. Short term finance. This is expected to provide funding for working capital and stocking requirement of non oil exporter. It is structured to take care of Trade export Financing.And Pre and Post shipment funding gaps.
Tenor: It has a maximum tenor of one year and can be rolled over twice subject to CBN approval.
Interest Rate: 7.5% all inclusive with roll over fee of 0.25%.
The facility is expected to be cleaned up every 90days.
2. Medium To Long Term finance. The facility is expected to take care of export oriented projects funding such as Expansion of export –oriented facilities and Financing businesses along the export value-chain.
Tenor: It is tenured for a maximum tenor of 10 years with 2year moratorium inclusive
Interest Rate: 9% all inclusive. Interest charges during moratorium period can be funded separately along side project funding or capitalized
Repayment of principal and interest after the moratorium period will be quarterly

Loan limit
The Facility will not exceed 70% of the total cost of the project or transaction subject to a maximum of five billion (N5b) Naira.

Required Documentation
The following are the basic documents required to access the fund :
• Written request from the customer to a participating financial institution (PFI) seeking funding under the ESF.
• Completed Application Form.
• Certified true copies of Business registration documents.
• Feasibility Study/Business Plan of the project.
• Relevant Permits/Licenses/Approvals (where applicable).
• Verifiable Export Orders / Contracts or Agreement & Arrangements / Commitments.
• Environmental Impact Assessment (EIA) Report (where applicable).
• And all other document as may be requested by the PFI

Application and approval process.
• Exporter wishing to access ESF applies to the bank by executing the application form, complying with its terms and conditions.
• The PFI reviews application to assess eligibility under ESF and viability for the applicants project/business..
• The PFI submits ESF loan application on behalf of eligible export oriented enterprise to NEXIM.
• NEXIM reviews and submits the appraised ESF application to CBN for reviews and approval/decline.
• CBN notifies NEXIM of its approval / decline.
• NEXIM advises approval/rejection of application to PFI.
• Upon approval by CBN, NEXIM advises PFI and the fund is made available to PFI under advice to NEXIM.
• The loan is then disbursed customer within 3 working days of receipt of funds from CBN.
• Repayment from customer (principal and interest) is remitted to CBN on quarterly basis along with appropriate returns/reports.

You may wish to contact us via email: info@nigerianbanker.com or bestedgeconcept@gmail.com for more details
Source: www.nigerianbanker.com