CBN supports banks with N50bn RRF for export financing

The Central Bank of Nigeria (CBN) has expanded the Export Credit Rediscounting and Refinancing Facilities (RRF) by N50 billion to support the Deposit Money Banks (DMBs) in the provision of pre- and post-shipment finance to exporters to undertake export transactions.
This is to ensure continuous flow of credit to the export sector at competitive rates, especially against the background of declining export loans and the need to promote sustainable non-oil exports.
To implement the facility, CBN will invest in a N50 billion debenture to be issued by the Nigerian Export – Import Bank (NEXIM) in line with Section 31 of CBN Act. Act.
Consequently, the CBN on Thursday, issued guideline which describes and outlines the revised operational modalities of the RRF towards the provision of a discount window to liquefy the export credit transactions of Deposit Money Banks, thereby improving exporters’ access to export credit at any given time.
The objective of the RRF is to ensure encourage and support DMBs to provide short-term pre- and post-shipment finance in support of exports by providing a discount window to exports financing banks and therefore improving their liquidity and exporters’ access to export credit.
The guideline stated that all the DMBs who have sanctioned /extended export credits are eligible as Participating Banks under the RRF Window in order to improve their liquidity and expand their export credit portfolios.
It adds that all existing / potential export-oriented companies duly incorporated / registered in Nigeria and undertaking non-oil exports transactions of goods and services that are not under a subsisting Exports Prohibition List shall be eligible to benefit under the scheme. However, facilities availed under any of the existing CBN funding schemes are not eligible under the RRF Window.
The tenor in respect of the RRF shall be a maximum of 360 days,while each Participating Bank will have a transaction exposure limit under the RRF Window of a maximum of N2 billion to N5 billion as may be determined from time to time based on Participating Banks’ credit ratings and volume of non-oil exports transactions / beneficiary clients being supported.