ABSTRACTThis research work scrutinized the role of financial institution in export financing export financing is very important, as Nigerian Exporters have to complete with exporters from other parts of the who have already in the market and have easy.Access to various type of export finance sources.  To be able to complete effectively with buyers able to offer attractive terms to forgiven buyers especially through bettered payment facilities which their competitors had provided all along with official insurance facilities to minimize the risk exporting to other nations.  The federal government has and it still working hard is encourage export.  A good step towards this is promulgation of export incentives and miscellaneous provisions degree of 1986, which came up with numerous incentive to export.  More also, is the inauguration of NEXM.  In a nutshell, its pertinent to not that export financing is of great importance towards economic development and balance of payment of our nation.

TABLE OF CONTENTSCHAPTER ONE1.1              Background of the study

1.2              Statement of the problem

1.3              Objective of the study

1.4              Significance of the study

1.5              Limitation of the study

1.6              Definition of terms

CHAPTER TWOREVIEW OF RELATED LITERATURE

CHAPTER THREERESEARCH DESIGN AND LITERATURE3.1              Sources of data (secondary source only)

3.2              Location of data

3.3              Method of data collection (literature work only)

CHAPTER FOURFINDINGS

CHAPTER FIVE5.1              Conclusion

5.2              Recommendation

5.3       BibliographyCHAPTER ONE1.1       BACKGROUND AND OVERVIEW

The banking system had played a role in management of policy changes that ranges from advising assisting companies and individual on how to enter export markets through financing and handling shipping documents to collect of export proceeds.  The role of financial institutions had thus that of a “catalyst” and a committed broker”.

Generally, an exporter can meet his/her financial I need in a numbers of ways:

–                      Advance payment from the oversea buyer

–                      Credit allowed to him by his suppliers

–                      Internally generated fund

–                      Credit provided by the government of the country of the buyers.

Banks finance the major position of export transaction.  The export credits given by banks to exporters is linked with various duration of the transaction.  The stages are divided into per-shipment and post-shipment.  The duration of the credits on the other hand are classified.  As short medium and long term.  Short-term ranges as short-term ranges from the period of 30 to 100 days.  The medium-terms ranges from the period of 180 days to 5 years while the long-term is from 5 years and more.

The exporter needs pre-shipment finance for securing the raw materials and other input required for the execution of an export order and also to arrange for the shipment of the goods to foreign market.  The credit is regarded as a loan or advance granted to finance the purchase, processing or packaging of goods on the basis of:-

a.                   Letter of credit opened in favour of the by an overseas importer of goods.

b.                  Issuance of warehouse warrants by accredited and rebated warehouse company.  The duration provided by banks usually does not exceed 120 days – post shipment credit is a loan, advance or any other credit provided by the bank to an exporter of goods, from the date of extending the credit offer shipment of goods to the date of receipt of export proceeds within 60 days.  The main types of post-shipment are negotiation of exporting documents under letter of credit and negotiation of export bill drawn confirmed export contracts or order.  It’s a part of government in a native to exporters the government established the Nigerian Exportant Bank (NEXM) which provided both long and short-terms credit through the commercial and merchant banks to support exports of non-oil product.

1.2              STATEMENT OF PROBLEM

It is regrettable that despite the finding and incentives mechanisms put in place by the financial institutions to stimulate growth of export, the contribution because of these low returns, the financial institutions face the risks of non-credits given to the exports several reason are attributed to this.

First is the problem of policy instability:     It is needless to formulate a policy on export will only last for a short time for examples the re-introduction of regulatory guideline in domiciliary accounts was disincentive to exporters.  This was revised later by the Central Bank of Nigeria (CBN) circulation in September after much pressure.  Presently, NEXIM only provides funds and transfers the risk to the other banks.  Second is the problem inadequate equipment of information related to the importing country’s culture geography, population and wealth.

This results in bringing low returns thereby increasing the risk being faced by the financial institution who finance them.  The most serious of all problems is the Nigerian Businessman’s image through the activities of some of its citizen have developed negative business image both a home and abroad.  The poor images includes the following:

1. Non-performance of contracts

ii.   Advance free fraud (419) (syndrome)

iii.  Cheating

iv.  Supply of poor quality products

v.   Manipulation of weights and document

1.                  vi.  Production of lack products

1.3              OBJECTIVES OF THE STUDY

i.                    The modalities adopted by the financial institutions in assessing goods for export.

ii.         To determine the different economic policies adopted by the government to support finance and their effectiveness on the export business

iii.        To find out what extent to which export oriented industries are financed by the institution of Nigeria.

iv.        To find out the problems encountered by financial institutions in export product financing.

v.         To examine/determine the prospects of export finance in Nigeria.

vi.        To make recovery on how to improve export financing.

1.4              SIGNIFICANCE OF STUDY

The study of this research topic will benefit the nation in the following ways:-

i.          General Economy:    It will help the nation in diversifying the foreign exchange and revenue base of the nation well as reliving pressure on the balance of payment.

ii.         Exporters:      Export-financing will go along way in helping Nigeria exporters to complete favourably with their international counterpart.

iii.        Manufactures:           With the introduction of SAP in 1986 many producers have been oriented into the system and hopefully manufactures of export oriented goods with the financial institutions incentives will improve their production potentials as well as produce large quantities for export purpose.

iv.        Financial Institution: This project work will look into the problems and prospects of the institution in export financing and recommend ways to improve it

v.         Research Students:   This project work will be a valuable work for student who may carry out similar research work in related field for reference purpose.

1.5              DEFINITION OF TERMS

i.          Foreign Exchange:    This is the currencies of other country reserved in a given country.

ii.         Balance of Payment: This is relationship between a country’s receipt of payments and a country’s payment to other countries.

iii.        Export-Oriented Goods:       These are goods produced with a sole intention of exporting them to their countries in order to generate foreign exchange.

iv.        Pre-Shipment and Post-Shipment:  This is a loan or advance or any form credit before and after the shipment of goods to the date of receipt of export proceeds within 60 days.