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This study looked on the role of financial institutions in export finance. Export financing is critical because Nigerian exporters must compete with exporters from other regions of the world who are already in the market and have an advantage.

Access to a variety of export financing options. To be able to compete effectively with purchasers, they must be able to offer attractive terms to the buyers, particularly through improved payment facilities that their competitors had supplied all along, as well as formal insurance facilities to reduce the risk of exporting to other countries.

The federal government has worked hard and continues to work hard to boost export. A good move in this direction is the 1986 Export Incentives and Miscellaneous Provisions Degree,

which established various export incentives. Also noteworthy is the launch of NEXM. In a summary, it is important to note that export financing is critical to our nation’s economic development and balance of payment.

The banking sector has played a part in policy change management ranging from counselling and supporting enterprises and individuals on how to enter export markets through financing and managing shipping paperwork to the collection of export proceeds. Thus, financial institutions played the roles of “catalyst” and “committed broker.”

In general, an exporter can meet his or her financial needs in a variety of ways:

– Payment in advance from the overseas buyer

– The credit extended to him by his suppliers

– Funded entirely by internal resources

– Credit supplied by the government of the buyer’s home country.

Banks fund the majority of export transactions. Banks’ export credits to exporters are connected to the term of the transaction. The stages are classified as pre-shipment and post-shipment.

However, the period of the credits is categorised. In the short, medium, and long term. Short-term ranges are defined as those spanning 30 to 100 days. The medium-term spans 180 days to 5 years, while the long-term spans 5 years and beyond.

Pre-shipment finance is necessary by the exporter in order to secure the raw materials and other input required for the execution of an export order, as well as to arrange for the shipment of the goods to the foreign market.

Credit is defined as a loan or advance made to support the acquisition, processing, or packaging of commodities based on the following criteria:

a. A letter of credit is opened in the name of by an overseas importer of goods.

b. Issuance of warehouse warrants by an accredited and rebated warehousing firm. Banks’ post shipment credit is a loan, advance, or any other credit offered by the bank to an exporter of goods, from the date of issuing the credit offer shipment of goods to the date of receipt of export proceeds within 60 days.

Negotiation of exporting documents under letter of credit and negotiation of export bill drawn approved export contracts or orders are the two primary forms of post-shipment.

The government formed the Nigerian Exportant Bank (NEXM) to boost non-oil exports by providing both long and short-term loans through commercial and merchant banks.


It is regrettable that, despite the discovery and incentive mechanisms put in place by financial institutions to stimulate export growth, the contribution due to these low returns, the financial institutions face the risks of non-credits given to exports for a variety of reasons.

The first issue is policy insecurity: it is pointless to develop an export policy that will only endure a limited time, for example. The reinstatement of regulatory guidelines in domiciliary accounts was a deterrent to exporters.

After tremendous pressure, the Central Bank of Nigeria (CBN) changed the circulation in September. NEXIM currently only offers funding and transfers risk to other banks. The second issue is a lack of information about the importing country’s culture, geography, population, and wealth.

This results in low returns, increasing the risk faced by the financial institutions that finance them. The most critical of these difficulties is the Nigerian businessman’s image,

which has created a terrible business image both at home and abroad as a result of the acts of some of its citizens. The following are examples of poor images:

Contract non-performance ii. Advance free fraud (419) (syndrome)

iii. Deception

iv. Provision of low-quality goods

v. Weight and document manipulation

1. vi. Manufacturing of insufficient products


i. The methods used by financial organisations to evaluate items for export.

ii. Determine the various economic policies implemented by the government to assist financing and their impact on the export industry.

iii. Determine the extent to which the Nigerian institution finances export-oriented industries.

iv. Investigate the issues that financial institutions face when funding export products.

v. To investigate/determine the opportunities for export finance in Nigeria.

vi. To recoup from ways to boost export financing.


This research topic will benefit the country in the following ways:

i. General Economy: It will assist the country in diversifying its foreign exchange and revenue base, as well as relieving pressure on the balance of payment.

ii. Exporters: Export financing will go a long way towards assisting Nigerian exporters to compete favourably with their foreign counterparts.

iii. Manufactures: Since the introduction of SAP in 1986, many producers have been oriented into the system, and manufacturers of export-oriented goods will hopefully improve their production potentials as well as produce large quantities for export purposes with financial institution incentives.

iv. Financial Institution: The project work will investigate the institution’s challenges and opportunities in export finance and offer strategies to improve it.

v. Research Students: This project work will be useful for students who may do comparable research in a related topic as a reference.


i. Foreign Exchange: This refers to the currencies of other countries that are held in a certain country.

ii. Balance of Payments: This is the link between a country’s receipts and payments to other countries.

iii. Export-Oriented items: These are items created solely for the purpose of exporting them to their respective countries in order to generate foreign exchange.

iv. Pre-Shipment and Post-Shipment: This is a loan, advance, or other type of credit given before and after the shipment of goods until the date of receipt of export revenues within 60 days.

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