DRAFT Improving the SMEs Access to Trade Finance
in the OIC Member States
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While ECAs were originally created as institutions of post-war reconstruction in Europe,
mandated to support economic recovery through export, the scope of activities of export credit
entities has expanded significantly since then.
There is no single or definitive model related to the mandate, structure or focus of an export
credit agency. A spectrum of institution types, ranging from public sector to hybrid to fully
privatized, is wide, and the exact nature of mandates and areas of focus varies significantly.
While many ECAs are guided by the OECD Consensus in terms of their
approach to the market the interpretations of ECAs and of their governments about scope and
nature of operations varies significantly.
The Export-Import Bank of the United States, for example, is directed by Congress to actively
avoid competing with private sector providers of finance or risk mitigation solutions. Not only
is US Exim expected to avoid such a competitive posture, but they are meant to exit a particular
realm of activity if it appears that there is interest from a private sector provider in becoming
active in a particular area.
Canada’s national ECA, Export Development Canada (EDC), by contrast, takes a very wide view
of its mandate, particularly since the last Parliamentary review of its mandate. EDC provides a
comprehensive set of financing and risk mitigation solutions, and is empowered to take equity
stakes in foreign companies if it can be shown that there is the potential for some level of
benefit to flow to Canada. The dynamic between EDC and the Canadian banks includes a
significant collaborative dimension, as well as a degree of competitiveness that some of the
banks have found historically objectionable, given the inherent advantage that a government
entity will have, over a financial institution.
In addition to the broad range of mandates for various ECAs, it is notable that the product and
solution set available through these various agencies is also at significant variance.
Some ECAs, including US Exim and UK Export Finance will periodically undertake competitive
analyses of the operating models and product offerings of agencies in other markets, as a
means of influencing national policy and potentially also impacting international practice in
the realm of export credits, which can sometimes generate significant dispute, if such credits
are seen to be unfair subsidies in support of export activity.