Improving the Role of Eximbanks/ECAs in the OIC Member States
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b. The ability and willingness of banks and other financial institutions and credit
insurers to meet these needs and requirements.
c. And so, the nature and extent of gaps existing between what exporters, large and
small, need and what is currently available from banks, financial institutions and
credit insurers.
3. Validate analysis and identify policy options: When the analysis has been completed,
further consultations will be necessary in order to test, review and validate the nature
and extent of the gaps which have been identified. Moreover, an important part of this
second phase of consultations will be to collect views on what the various parties,
private and public, believe government should do – and, importantly, should not do – in
order to fill or help to fill these gaps, what the potential role for new government actions
might be and what might be the potential costs.
It is inevitable that some gaps will have been identified but it should be recognized that
this does not automatically mean that it is appropriate or desirable that any or all of such
gaps should be filled by government. For example, there is no value in government
encouraging exporters to sell to buyers or to countries which are very unlikely to pay for
them.
4. Consider a variety of business models and their fiscal and financial implications:
Depending on the defined market segment, it may not be cost effective or sensible to set
up a brand new institution. It may be that an existing entity can be instructed to take on
these tasks under a specialized program. Or, it may be preferable to set up at the outset a
new institution, with a clear vision and mandate, proper capitalization to support the
expected business volumes, suitable governance structures and appropriate government
financial backstopping. Solutions proposed should:
a. target the problem explicitly;
b. minimize the fiscal risk to the government – including the potential variability of
any fiscal cost;
c. minimize the risk that the program will crowd out existing private providers of
export financing products or hinder future development of export credit
products;
d. minimize the likelihood that the proposed program will distort exporter
behaviour by encouraging them to divert resources to higher risk activities;
e. draw on existing support mechanisms within Government and avoid duplication
with other business assistance programs;
f. balance any compliance costs against achieving the program’s broad outcomes,
while maintaining the capacity of the managing agency to monitor the program,
commensurate with the risk to the Government;
g. include clear eligibility criteria, which avoid undue administrative discretion;
h. include a process for public reporting of the outcomes achieved and;
i. include a provision for independent, periodic review.