Trade Finance Opportunities in Nigeria for Investors

Trade Finance Opportunities in Nigeria for Investors

Trade Finance Opportunities in Nigeria for Investors

Nigeria’s import requirements, commodity flows, and retail demand create consistent trade finance volume. Private credit can fund insured receivables, borrowing base RCFs, inventory repo, and confirmed LC discounting for qualified sponsors. With clear controls, FX planning, and documentary strength, programs can be structured to institutional standards and repaid from contracted cash flows.

Why Nigeria

Scale Of Demand
Large population and urban consumption drive steady import cycles across fuels, food staples, and FMCG inputs.
Recurring Trade Lanes
Refined products, grains and oils, fertilizers, metals, machinery, and power equipment create repeatable lanes.
Structured Takeouts
Repayment from LC settlements, insured AR, or escrowed distributor collections supports self liquidation.
Diversification
Investor portfolios gain non correlated exposure via short tenors and documentary evidence heavy structures.

Where Private Capital Fits

Facilities And Instruments
  • Borrowing base RCF secured on eligible AR and inventory
  • Inventory repo with title transfer and collateral management
  • Confirmed LC issuance and usance LC discounting
  • Insured receivables finance and forfaiting
  • Pre import funding with escrowed disbursements
Eligible Sectors
  • Refined fuels and lubricants supply chains
  • Food commodities and edible oils
  • Fertilizers and agro inputs
  • Metals and construction materials
  • Power equipment, generators, and spares

FX And Cash Management

Currency Planning
Match currency between obligations and receipts. Use hedging where available. Consider natural hedges via USD receipts from distributors.
Collections Control
Controlled accounts and escrow waterfalls. Daily sweeps. Distributor collections mapped to repayment schedules.
Settlement Evidence
UCP 600 compliance, BLs, inspection, insurance, and assigned proceeds support self liquidation and recoveries.

Picking The Right Structure

Instrument Use Case In Nigeria Repayment Source Key Controls
Borrowing Base RCF FMCG distributors and fuel marketers with frequent turnover Daily sweeps to controlled accounts Eligibility tests, advance rates, BBC reporting, covenants
Inventory Repo Stock at port or bonded warehouse with reliable custody Sale proceeds or buy back on release Title transfer, CMA oversight, daily marks, release tests
Confirmed LC Discounting Importers with usance LCs confirmed by rated banks Confirming bank payment at maturity UCP 600, clean documents, bank and country limits
Insured AR Finance Distributors selling to diversified obligors with policies Collections from debtors or LC proceeds Debtor limits, policy terms, concentration caps
Pre Import Facility Supplier deposits and freight before LC issuance Takeout via LC or receivable finance Escrowed draws, assignment of contracts, negative pledge

Risk Control Framework

Operational Controls
  • Assignment of proceeds and notice to buyers
  • Controlled accounts and escrow waterfalls
  • CMA supervision and warehouse receipts
  • Insurance alignment with eligibility tests
  • Distributor frameworks with caps and collateral
Compliance And Legal
  • KYC and AML on sponsors and counterparties
  • Sanctions and PEP screening with ongoing monitoring
  • Local counsel for security perfection and enforceability
  • Clear tax and customs position for each lane

Data Room Checklist For Nigeria Programs

Category Documents
Corporate CAC filings, constitutional docs, beneficial ownership, board approvals
Financial Audited accounts, AR aging, inventory reports, cash flow, bank statements
Trade Contracts, POs, invoices, BLs, inspection, insurance, LC texts where applicable
Legal And Security Security documents, warehouse receipts, CMAs, escrow drafts, legal opinions
Compliance KYC, AML, sanctions screens, tax certificates, permits and licenses

Mini Term Sheet Examples

Borrowing Base RCF
Limit: USD 40,000,000 revolving. Advance: AR 75 percent eligible. Inventory 45 percent eligible by location and product.
Pricing: SOFR plus spread by risk and controls. Line and non use fees apply.
Security: Accounts, inventory, assignment of proceeds, controlled collections. BBC monthly then quarterly.
Inventory Repo
Ticket: USD 15,000,000. Advance: Up to 80 percent of NOLV based on daily marks.
Controls: Title transfer to SPV. CMA on site. Release tests by buyer payment or cash top up.
Tenor: 45 to 120 days. Exit: Sale proceeds or buy back per schedule.
Confirmed LC Discounting
Issuer: Importer with usance LC confirmed by rated bank. Tenor: Up to 180 days.
Pricing: Tenor and bank risk driven. Country adders by policy.
Documents: UCP 600 compliance, clean presentation, sanctions and AML clearance.

Request A Nigeria Trade Finance Briefing

Share lanes, volumes, counterparties, and target structure. We will respond with a program outline, control set, and closing steps for institutional investors.

Start Client Intake

FAQ

Which investor profiles engage

Private credit funds, trade focused banks, and insurance linked investors seeking self liquidating exposures with short tenor.

What kills transactions

Weak audits, blurred title, missing inspection, insurance gaps, sanctions flags, and uncontrolled collections.

Can programs scale

Yes. Start with a smaller facility, prove controls and reporting, then step up with diversification and track record.

How do we handle FX

Map payables and receivables, use controlled accounts, and apply hedging where available. Align facility currency with repayment flows.

Which sectors are most investable

Refined products, food commodities, fertilizer inputs, metals and building materials, and power equipment with solid distributors.

What is the first step

Assemble the data room and align on structure. We screen lanes, set controls, and prepare a placement pack for investors.

Financely provides advisory, underwriting, and arrangement services through regulated partners. Financely is not a bank and does not issue letters of credit or make loans. All transactions are subject to underwriting, diligence, KYC and AML, investor or lender approval, and executed documentation. The ranges and examples above are illustrative only and do not constitute an offer of securities or a solicitation.

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Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


All submissions are promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.

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Once we receive your submission, our team will review your information to determine feasibility. If eligible, you will receive a proposal or term sheet within 1–3 business days. Visit our FAQ and Procedure pages for more information.

Disclaimer: Financely provides financing based on due diligence and feasibility. Approval is not guaranteed, and past performance does not predict future outcomes. All terms are subject to review. Financely primarily assists with structuring and distribution. Qualified parties carry out the project if the client approves the proposal.

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