Improving the Role of Eximbanks/ECAs in the OIC Member States

INTRODUCTION

1.1

Background

For nearly 100 years, governments around the world have established financial institutions or

facilities to support exports and investments. These institutions take the form of Export-Import

Banks (known as “Eximbanks”) which provide lending and other facilities in support of exports,

either directly to exporters or to foreign buyers to purchase national goods and services. In some

cases, governments establish Export Credit Insurance Agencies to insure commercial or political

risks in countries to where their companies are exporting. A number of countries also have

specialized development banks that are focused on international trade and investment. These

are often called Export Development Banks and, are similar to Eximbanks in terms of their

structure, status and facilities offered.

The more general term to describe the institution, which provides types of a range of financial

services – insurance, guarantees, financing - in support of trade and investment is an Export

Credit Agency (ECA). Eximbanks are therefore one of a variety of ECAs.

The first ECA was established in 1919 in the UK, the Export Credits Guarantee Department

(ECGD). By the 1970s, nearly all OECD countries had such schemes (with the exception of

Ireland) and, by the turn of the century, many emerging markets had also established their own

export credit insurance or export finance facilities. The history of such institutions within the

OIC countries is more recent. The first OIC ECA was established in 1984 in Tunisia.

This report, commissioned by the Committee for Economic and Commercial Cooperation of the

Organization of Islamic Cooperation (COMCEC), examines the ECAs in the OIC Member States

with a view to assessing and identifying ways of improving their role in increasing exports in

these countries. The objective of the report is also to help COMCEC in designing its programs,

projects and activities, as well as to provide a practical guide to ECAs, and to governments

wishing to establish ECAs. Specifically, the report:



Discusses of the role of ECAs in promoting exports



Defines of the success factors for the ECAs in promoting exports;



Analyzes the effectiveness of the ECAs of the OIC Member States and assess opportunities

and challenges; and



Presents practical recommendations for the Member States on improving ECAs

This report is organized as follows:

The introduction section of this study defines the role of ECAs as well as the importance of these

entities in promoting international trade and cooperation. The section also discusses

governments’ reasons for establishing ECAs and reviews key features of ECAs, noting the

variations in operating models, product offerings and relations with government, which are all

influenced by a country’s unique political, economic and social context.

For the purposes of this report, the more generic term “ECA” is used to mean both Eximbanks and Export Credit Insurance agencies.