African Development Bank (AfDB) Tuesday signed an agreement to provide two sovereign-guaranteed multi-tranche lines of credit (LoCs) of respectively $500 million to Bank of Industry (BOI) and $200 million to Nigerian Export-Import Bank (NEXIM) in order to support the modernization and expansion of export-oriented SMEs.
The LoCs will help SMEs in the country to be more competitive, scale up their operations and ultimately create more jobs in Nigeria. The LoCs will include a technical assistance package to strengthen institutional capacity of both BOI and NEXIM as well as their SME clients.
Robert Orya, NEXIM Managing Director, commented: “Thanks to AfDB’s support through this program, NEXIM seeks important economic development achievements, including approximately 55,000 new jobs for its SME clients, $1.6 billion in foreign exchange and an overall contribution of almost 7 percent to non-oil exports, including a 10 per ]cent share in Economic Community Of West African States (ECOWAS) exports. This facility will provide 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.”
Through this integrated financing package, the AfDB is supporting Nigeria’s efforts towards a more diversified economy away from oil and gas. The LoCs will supply multi-sector financing to address the challenge that SMEs face in accessing finance in the country.
Bank of Industry (BOI) is the leading catalyst for industrial development resources in Nigeria and one of the oldest development finance institutions in Africa. It was established in 1964 and reorganized in 2001. In line with its mandate to finance industrial development projects, BOI provides term finance and advisory services primarily to indigenous SMEs, to which it devotes at least 85 per cent of its resources.
Nigerian Export-Import Bank (NEXIM) is the national export credit agency of Nigeria. It was 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.