Improving the Role of Eximbanks/ECAs in the OIC Member States
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Analysis:
As an ECA which developed out of a domestic loan guarantee scheme, JLGC history and culture is
different than most other ECAs which were established at the outset to support foreign trade. Its
culture and focus is providing guarantees to SMEs, housing and personal loans, and export credit
is a single department with its own underwriting and marketing. The challenge for JLGC is that
the client base for the export credit business is different than their traditional clients. For the
credit insurance business, the main clients are exporters which seek to insure their accounts
receivables, whereas loan guarantees are in supporting of the banks. With a small staff of 37
overall, this makes it all the more challenging to develop the ECA business.
JLGC’s business model focusing on providing export finance to SMEs does not enable to develop
and grow its credit insurance business. An earlier cooperation agreement with COFACE did not
help as it tended to treat JLGC as a front office for COFACE with marketing and underwriting
controlled from Paris. A current cooperation agreement with ICIEC has a better chance of
success as it has the development of in-house underwriting capacity in JLGC as its ultimate
objective.
To increase the reach of JLGC and the profile of this product offering, Jordan Enterprise
Development Corporation (JEDCO) has become an agent of JLGC. This relationship with the trade
promotion agency is an excellent delivery channel and further collaboration should be
encouraged.
3.4.5 Lebanon
The Lebanese Credit Insurer (LCI)
Description:
The Lebanese Credit Insurer s.a.l. (LCI) was established in 2001 as a joint venture between
Atradius –one of the largest credit insurers in the world – and a group of local and regional
insurance companies and private holding companies. It is the first independent specialized
Credit Insurance Company in Lebanon and the Middle East and aims to support SMEs in business
expansion and sales growth within the MENA region by covering them against the risk of non-
payment by their customers.
As a privately owned company, LCI is not directly influenced by the government, nor does the
government does have any role in the governance structure of LCI. Unlike other models for
insurance within the OIC countries and globally, LCI does not offer any facilities on behalf of the
government in exchange for a fee nor does it enjoy any backstop from the government. LCI is
reinsured by reinsurers specialized in credit and bonds reinsurance.
The Ministry of Economy and Trade does offer a program called “Kalafat”
which offers loan guarantees in
support of banks that lend to SMEs, but this is not export related.
LCI’s insured turnover is in excess of USD 1.4 billion while its actual outstanding exposure is in
excess of USD 618 million.