Improving the Role of Eximbanks/ECAs in the OIC Member States
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Analysis:
The rationale for government involvement in this area was driven by the drop in oil revenues in
the 1980s. EDBE's law of establishment and articles of association stipulated that one of its main
purposes is "to establish and implement a system to secure Egyptian exporters against commercial
and non-commercial risks caused by factors other than the exporter's own errors, whether these
risks would be evoked pre- or post- shipment."
Although EDBE was established to serve as the government’s ‘financing arm’ in promoting
Egyptian exports and enjoys the government’s financial back-stop, its role as a public policy bank
is limited by its commercial focus. EDBE operates like a full-fledged deposit-taking commercial
bank, offering full range of banking products, including consumer loans.
EDBE has, however, used its power to invest in other entities, as majority shareholder in Export
Credit and Guarantee Company of Egypt (ECGE).
Export Credit and Guarantee Company (ECGE)
Description:
One of EDBE’s 15 subsidiaries is Export Credit and Guarantee Company (ECGE) which was
established in 1992, as a joint stock company. The purpose of ECGE is to increase the
government’s support to exporters by providing insurance to ensure against commercial and
non-commercial risks, thereby enabling exporters to gain access to credit and venture into new
markets. The company issues insurance policies covering up to 80% of losses.
With authorized capital of 500 million Egyptian Pounds and paid-in capital of 250 million
Egyptian Pounds (USD 72.8 million and USD 36.4 million, respectively), EDBE is the largest
shareholder with a stake of 70.55%. National Investment Bank (which owns more than 40% of
EDBE) has the remaining ownership. Of the 10 Board members, 5 come from EDBE and two from
NIB.
ECGE offers standard export and domestic credit insurance (whole turnover and single risk) as
well as a policy towards banks for unconfirmed letters of credit. Subsequently, the government
reinsures all of ECGE’s operations. It also provides a number of advisory services such as
information reports for buyers and debt recovery.
ECGE’s vision is “to be the internationally recognized Export Credit Agency supporting the
National Exports and [a] first class Export Credit Insurance Agency and Factoring Company
staffed with first class professionals”.
ECGE is a member of the Aman Union and the Prague Club. In addition, ECGE is a member of the
COFACE Partners network.
Analysis:
ECGE has a very critical link to the government through reinsurance of ECGE’s insurance
activities. As such ECGE can be considered an important public policy tool. ECGE assesses the