Improving the Role of Eximbanks/ECAs in the OIC Member States
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Even if it is, initially, felt that government involvement might be appropriate, an early
decision for government to take is whether it wishes only to become involved in strictly
the areas of perceived gaps or whether it would prefer to consider operating a little
more widely.
Obviously, it will be more difficult for any government entity or facility to avoid overall
losses or to break even if it only operates in areas where banks or insurers are currently
unwilling to provide facilities. Put another way, that it will only become involved in areas
or cases where banks and insurers regard the risks as unacceptably high. In other words,
the questions should be asked: is the government willing to compete with banks and
insurers or to duplicate some of their activities, recognizing that, if it does so, it will get a
better and diversified portfolio of risk and improve the prospects of avoiding overall
losses? It should be noted that the wider the spread of risk, the easier it will be to
consider taking on the more difficult risks. Or, since private banks and insurers are
unlikely to welcome new competition, the government might prefer only to complement
and co-operate with existing suppliers of finance and credit insurance.
So the key initial decisions are first, whether the government is willing to become
involved at all in filling identified gaps and, second, whether it would prefer to operate
on a strictly “gaps only” basis or more widely, in order to get better/higher income and a
wider spread of risk.
5. Consider options for the preferred corporate form and related governance
arrangements: Having taken these fundamental decisions, the next stage will be to
develop options for government involvement which will need to review the corporate
form – be it 100% government owned, reporting to a Ministry or the Central Bank, or a
joint stock company with shareholdings from banks, insurers or others. Corporate status
and form (e.g. a new organization or a new function for an existing body and, if a new
entity, whether it should be a government Department or a government-owned company
or corporation. Should it be wholly government-owned or some kind of joint venture?)
When decisions are being considered and taken on the provision of any financing or
insurance facilities by any new government entity and on what form or status the
organization providing the facilities should best have, then one relevant issue will be the
way in which Government delivers other public policy facilities. For example:
 Are there already a number of government companies or corporations and are
these wholly or partly owned by government?
 Do any existing organizations provide a model for a new entity?
 Could the new facilities in fact be provided by an existing government-owned or
linked company or corporation?
A vital point for early resolution is the extent to which the full faith and credit of the
government will be behind the operations of the entity providing the insurance and
financing and/or of the facilities it provides, and what powers the entity will have to
borrow, if any.