Export Credit Guarantee Facility

One of the major problems of exporters is the non-availability of funds. Banks are usually reluctant to finance export transactions particularly at the pre-shipment stage because of the inherent high risk at this stage.

NEXIM's Export Credit Guarantee facility is designed to protect banks and suppliers against the risks of non-payment for either Pre-Shipment or Post-Shipment loans or advances granted to exporters to meet short-term export contracts.

Eligible transactions covered under the ECG are: The ECG Covers of a maximum of 75% and 85% loans and advances availed for Pre-shipment transaction and Post-shipment Guarantees respectively.

Eligible Exporters

Eligible exporters are companies duly registered in Nigeria and co-operative societies (whether as manufacturing, merchant or service exporters).

Ineligible Credit Advances

The following credit/advances are not eligible for cover:

1. Loans financed or refinanced by NEXIM
2. Loans which are not for export-oriented transactions
3. Loans granted for exportation or importation of banned goods

Guarantees Available Under the Facility

Pre-Shipment

This is a guarantee of credits/advances granted by a bank for a term not exceeding 180 days for the purpose of manufacture, purchase, processing and/or packaging of goods to be exported under a confirmed export order.

Post-Shipment

This is a guarantee of credits/advances granted by a bank in Nigeria for a term not exceeding 180 days against an export bill or any other receivables.

Risks Covered

The risks covered which shall be the causes of loss under both pre-shipment and post-shipment policies are stated below:

1. Cancellation of export license
2. Imposition of restriction on the export of goods.
3. Protracted default by the exporter.
4. Insolvency of the buyer.
5. Protracted default by the buyer.

Exclusions

The following risks are excluded under the guarantee:

1. Non-payment resulting from negligence/fraudulent acts of the exporter or its agents.
2. Non-payment resulting from the failure of the exporter to fulfill the terms of the export contract.
3. Default of the exporter's agent or collecting bank.
4. Non-payment resulting from physical damage, which should normally be insured with insurance companies.

Percentage of Cover

The proportion of the cover, to be provided, is as follows:

• Pre-shipment guarantee: 75% of loans and advances
• Post-shipment guarantee: 85% of loans and advances