Ex-Im Bank Chairman James A. Harmon Signs Master Guarantee Agreements with Four Private Sector Nigerian Banks: Union Bank Plc, United Bank for Africa Plc, FSB International Bank Plc, and Equity Bank of Nigeria Ltd.
FOR IMMEDIATE RELEASE August 26, 2000
U.S.A. — Linda Formella, Ex-Im Bank, Washington, D.C.: 202-565-3200, Nigeria — Tim Smith, U.S. Embassy, Lagos: 234-9-523-0960
Abuja, Nigeria: James A. Harmon, chairman of the Export-Import Bank of the United States (Ex-Im Bank), today signed Master Guarantee Agreements entering into partnerships with four Nigerian banks: Union Bank Plc, United Bank for Africa Plc, FSB International Bank Plc, and Equity Bank of Nigeria Ltd. Through these agreements, Ex-Im Bank will be able to guarantee the repayment of loans made by these banks to creditworthy Nigerian buyers that purchase U.S. goods and services. Nigeria is only the second country in sub-Saharan Africa (the other is South Africa) where banks have been approved for the master guarantee agreement.
The Master Guarantee Agreements are vehicles to strengthen the partnerships between Ex-Im Bank and these Nigerian banks and will greatly enhance the ability of these banks to lend money to local businesses, and therefore increase the access of businesses to financial capital, goods and services, Ex-Im Bank Chairman Harmon said.
Through the Master Guarantee Agreement (MGA), Ex-Im Bank provides a comprehensive guarantee to cover the lender's risk of nonpayment of principal and interest of the obligations of creditworthy foreign buyers of U.S. goods and services. Ex-Im Bank guarantees up to 85 percent of the U.S. export value of the purchase. The buyer is required to provide a cash payment covering the remaining 15 percent.
In October 1999, Ex-Im Bank opened for short- and medium-term financing to the private sector in Nigeria. Ex-Im Bank is an independent U.S. government agency that assists in financing the export of U.S. goods and services to developing markets around the world, through export credit insurance, working capital loan guarantees, loan guarantees and direct loans. In fiscal year 1999, Ex-Im Bank approved nearly $600 million for U.S. exports to sub-Saharan Africa — an 11-fold increase over the previous fiscal year.
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