...Pledges flexibility in collateralization for SMEs
... Reiterates efforts to boost Shea butter productionBy Palma Ileye
To achieve diversification from oil sector and grow the nation’s economy, the Nigerian Export and Import Bank, NEXIM, has called for more investments in the non-oil sector so as to boost sustainable development.
The Managing Director and CEO of the NEXIM, Mr. Abubakar Abba Bello made the call yesterday in Abuja during an interactive session organized by the AIl Progressive Congress, APC Youth Forum on efforts to explore SME financing, non-oil export opportunities, and how NEXIM was driving Nigeria’s agro-industrial revolution to empower businesses for global success.
Bello, underscored the importance of developing the economy through non-oil sector saying that, it was a huge opportunity for the country to achieve sustainable development through the sector if well harnessed.
He said, “I don’t want to point to specific value chain. You know, the non-oil export sector is an opportunity for the country, whether you are in the agric value chain, or you are in services the creative sector, or you want to venture into solid minerals, we are operating sub optimally in all value chains as we are today. So I want to generalize it, that the opportunity is in the non-oil value chains.”
Speaking on collateralization which he said has always been a challenge, he reiterated NEXIM’s efforts towards providing the necessary support for investment through its various facilities.
The Managing Director said the Bank was set to be flexible with financing packages and reduce collateral requirements for Small and Medium Enterprises, SMEs, this is particularly for SMEs with collateral challenges.
The NEXIM boss said the Central Bank of Nigeria, CBN, has made alternative collateral in the market known as ‘National Collateral Registry’ which enables movable assets.
He emphasized that collateralization was a backup to enhanced SMEs ideas when the business is bankable and adjustable for collateralization requirements.
Fielding questions from the press, Mr. Bello highlighted that the biggest users of the National Collateral Registry were the Microfinance.
He noted that personal valuables like cars, jewelries and others can be registered on the collateral registry.
He explained, “NEXIM is an export creditor where one of our biggest functions is to do credit guarantees and insurance. We also work with State governments to ensure flexibility in our financing packages to reduce the collateral requirements.
“NEXIM is also a trade facilitator, and since we are putting money in financing export, we must also make sure that certain standards are met.
“For us, you know, collateralization is a backup. What is important is what your business is. If your business is bankable, then we can adjust those requirements for collateralization and see how we can support you to achieve your aspirations.”
Speaking further on export, he stressed the need for standardization of products to achieve sustainability and global competitiveness.
He urged investors on standardization of businesses saying, “So to the youth and the SMEs, what I would say is that if you are going to start a business, or you’re already in business, start from day one to say or to think that this business, even if you’re selling in the domestic market that this business is intended to compete internationally, so that the standardization and certification starts from from the beginning, rather than when you get to the point where you want to start exporting, you want to start reviewing your standards. Start from day one with the aim to compete in markets that are outside the market of Nigeria.”
He highlighted efforts to boost shea butter production in Nigeria, explaining that, “When we came on board in 2018 we noticed that despite the fact that shea butter is a growing business and a very large percentage of global origin of shea butter is Nigeria. We didn’t have one industrial plan that was processing shea in Nigeria, so we put it on the front panel that we’re going to create and finance industrial processing of shea.
“So far, we have four processing centres, one in Ogun State, two in Niger State, and one in Kano State and they are all in production.
“Also, about two weeks ago, during the commissioning of the fourth processing centre in Niger State, one of the complaints that the promoters had was that sourcing the raw material was very difficult, given that there’s already a tradition of producing for those that export it illegally in into neighboring countries where already there were industrial plants that exist. So, I think five days ago, government has banned for six months the exporting of shea butter out of Nigeria.
“What that has done is guaranteeing the supply chain for those four industrial plants that we have, and at a lower price, because before they were competing with people buying from outside. Now I think we are going to even have excess shea butter for the production, but I even want to appeal to government to perhaps even increase the period from six months to perhaps a year, because we want to also encourage more people to start investing in value addition for shea in Nigeria.
“And I also appeal looking at other value chains, agricultural value chains, we have to start the process of banning the export of primary products. We must add some value at home so that we can keep the jobs here. We can create work.”
He also encouraged youths contribution to the growth of the country’s economy also appealing that they should invest in various non-oil value chains.
“I am going to appeal to the youth and encourage to invest where your passion is. Whether it’s in the agric value chain, agro processing, in the creative sector. I know a lot of you are very innovative and have passion for creativity,” he added.
Mr. Bello urged the Nigerian youths and SMEs owners to think global and not limit their thinking to local standards so as to compete in the market place outside Nigeria.
