94% of exporters experienced rejection of financing request by Nigerian banks – Report

Ninety-four percent of exporters experienced rejection of their financing requests by Nigerian banks, says the Annual Trade Finance Survey Report in Nigeria.

It was the 2022 edition of the 3T Impex Consulting Annual Trade Finance Survey, tagged: “Stimulating Export
Finance Growth.”

It was the maiden edition of the study/report and also the first of its kind in the history of the international trade sector in Nigeria.

A financial Expert and Director, 3T Impex Trade Academy, Dr. Bamidele Ayemibo, at the unveiling of the report at the NECA House, Ikeja on Wednesday, said the survey, also showed that 42% of rejected export finance requests were done without any reason given to the exporters.

He added that 21% of the rejected export financing requests were based on lack or inadequate collateral security and that only 11% of exporters received approval for their export financing request.

Ayemibo disclosed that 57% of exporters identified access to export finance, port logistics and delays by government agencies at the port as major challenges hindering export growth.

He said only 22% of export financing requests were approved within one month of application and that 59% of exporters were attracted to a bank that have support services for exporters

Ayemibo stressed the need for the country to put up necessary sanctions to remove all bottlenecks Nigerians face at the port trying to export their products abroad.

He lamented that the country was currently experiencing a very high level of inflation which had resulted in high cost of living given that Nigeria is largely import-dependent, saying that the consequent of high rate of exchange of the Naira to major foreign currencies used to pay for imported goods has made the cost of importation to be at all-time high.

“It is no more news that export is the low hanging fruit that can help Nigeria increase its foreign exchange
generation. It is also important to state that exportation is the only means of generating foreign exchange that
the country has control over; and this is because other means of foreign exchange inflow like Foreign Direct
Investment, (FDI), Foreign Portfolio Investment (FPI), are controlled by investors who want to do business in
Nigeria while the foreign remittances are controlled by Nigerians in diaspora who want to financially support their
friends and relatives at home in Nigeria.

“This kind of report has become necessary because different people have varying opinions on the reason for the
low export volume from Nigeria; and this has made most efforts of the government not to yield the desired
results.

“This report has used a scientific methodology to determine the major factors hindering the growth of
export volume in Nigeria (particularly non-oil export) and proffers a comprehensive solution to the problems
through well-founded recommendations.

“The objectives of the survey include: identifying the challenges of export business in Nigeria, knowing the level
of export trade finance rejection, understanding the reasons for export trade finance rejection, understanding
the features that characterized approved export trade finance requests, identifying the challenges faced by
exporters in getting their export trade finance requests approved, and recommending solutions that will address
the identified challenges associated with export trade finance rejection with the positive effect of reducing the
trade finance gap,” he said.

Ayemibo also disclosed that SMEs occupied the larger percent of participants while those in Agric sector accounted for 50%.

He renewed appeal to the Commercial Banks to expedite action in making Forex available to exporters in boosting the sector.

Representing the Nigerian Export Promotion Council at the event, Mrs Allice Ibiyoye assured of conducive environment for those in the export sector in order to bridge the deficit in the country.

She believed such would have positive impact on the nation’s economy.

Some representatives of banks were of the view that they limited borrowing to finance export businesses largely due to risk involved.