Presentation: Benefits of Financing Nigeria’s Cashew Industries NEXIM & NCAN Financing Forum April 23 rd

Overview 2 PROBLEM: Difficulty in accessing bank financing that is affordable, appropriately structured and timely disbursed for Value Added Export Products REASONS: 1)Competition with investments that are lower risks (e.g. US Treasury bills) or are “strategic” (e.g. mining, telecom, oil & gas, etc.); 2)Lack of history of credit culture in the local banks relating to value added export crops such as cashew

3 SYNERGISM NCAN and NEXIM can facilitate the expansion of the transformational cashew sector by expanding on existing capacities: NEXIM Bank capacity to finance the development of export related industries; (NEXIM is lead promoter of “NCCFS” Nigerian Cashew Cluster Finance Scheme) NCAN capacity to respond to Member requests and needs ; (NCAN capacity to interact and communicate with Government, Multi and Bi Laterals in the interest of Members) Overview

Building the Ecosystem 4 NCCFS is already yielding results for Processors: 1)Improved Financial Structuring; 2)Improved Governance ; 3)Effective Collateral Management; 4)Increased Lending Activity; 5)Understanding the sector and its Risk Factors a)Risk Mitigation Tools b)Cash management Mobile Technology; 6)Inclusion of Commercial banks as active partners: a)Effective Implementation of Collateral Sharing; 7)Increased interaction between banks and companies. OPPORTUNITY

Building the Ecosystem 5 NCAN and NEXIM can improve access to finance through the EXPANSION of the NCCFS portfolio to INCLUDE all stakeholders in the cashew sector: Traders; Processors; Bankers; Service Providers; Exporters; Equipment manufacturers ……. OPPORTUNITY

NCCFS: Skills & Pipeline 6 SKILLS: NCCFS develops corporate financial skills: Credit analysis, financial modeling and returns analysis; Communication in the language of the financer; Structuring financing packages involving collateral, pricing and conditional terms; Identifying issues that may impact cash-flow generation; Building local Business Service Provider network

7 TRAINING: Provision of capacity-building to align language and metrics: To members; To financiers; To service providers PARTNERSHIP: Enhancing networks: 1)Financiers offer different investment instruments; Transaction Finance Working Capital Term Loans Equity 2)Business Service Providers in local areas that can deploy services more effectively NCCFS: Skills & Pipeline

8 TRANSPARENCY! The enhancement of NCCFS by NEXIM and NCAN will result in stronger governance of the companies that will attract financing and allow them to grow accordingly

Benefits 9 Mission: Provide NCAN members with support in accessing finance as another membership incentive Goal: Higher probability of financing by providing hands- on and tailored support including: Documentation and analytical support; Pairing with the appropriate investor; Technical Assistance for improved performance; Benefits to NCAN

Benefits 10 Mission: Provide access to finance for a Transformational Priority Sector for creating diversification of the Economy Goal: Meet Development Bank objectives through lending and banking services which create jobs, generate wealth and contribute to the overall development of the economy. Benefits to NEXIM

Benefits 11 Mission:Gain information, training and mentoring on matters relating to access to finance by Structuring Financial Needs Goal: Obtain Financing in order to meet the objective of growing their businesses through affordable, appropriate and timely financing Benefits to NCAN Members

Employment Impact 12 Hypothetical Impact of Improved Access to Finance

Production Impact 13 Hypothetical Impact of Improved Access to Finance

Thank You 14 Judson Welsh – Charles Polet – Office