Improving the Role of Eximbanks/ECAs in the OIC Member States
51
Description:
The Export-Import Bank of Malaysia Berhad (MEXIM) was established in 1995 as a government -
owned development financial institution and a subsidiary of the Ministry of Finance
Incorporated to promote trade and diversification of exports. Subsequently, it was also tasked
with facilitating the entrance of Malaysian firms into new markets, especially in non-traditional
markets. In 2005, MEXIM absorbed the insurance business managed by its former sister
company, Malaysia Export Insurance Berhad, becoming the country’s sole ECA.
Although a government owned entity, the Board has the independence to set strategic plans and
to review financial performance. MEXIM’s Board of Directors is comprised of seven 7Directors,
five of whom are independent Non-Executive Directors, one is a non-independent Non-Executive
Director (nominee of Minister of Finance Incorporated) and one is an Executive Director
(Managing Director/Chief Executive Officer). The Board considers and approves the annual
financial statements including interim and final dividend to shareholders.
In 2013, MEXIM paid a final ordinary dividend totaling RM21.7 million (USD 6 million).
As a full-service ECA, MEXIM offers a complete range of products – both conventional and
Islamic versions. Given the nature and characteristics of the export sector, MEXIM focuses on
both medium/long-term export and project finance transactions, as well as short-term credit
insurance. MEXIM provides financing and guarantees for trade activities in Malaysia and projects
abroad and insurance facilities to address sovereign and commercial risks of foreign
governments and companies respectively. It has financed and insured transactions in power
generation and distribution, maritime, infrastructure, construction, telecommunications,
agriculture, housing developments, tourism as well as oil and gas.
MEXIM is a member of the Berne Union, Asian EXIM Banks Forum, the Aman Union, Association
of Development Financing Institutions in Asia and the Pacific and has a reinsurance facility
agreement with ICIEC. It also signed cooperation agreements with ECAs in Turkey, Emirates and
Oman as well as for improved exchange of information and technical assistance on credit
insurance and reinsurance in the region.
MEXIM also works closely with local agencies such as Ministry of International Trade and
Industry (MITI), Malaysia External Trade Development Corporation (MATRADE), Malaysian
Industrial Development Authority (MIDA), Small and Medium Enterprise Corporation Malaysia
(SMECorp) and Construction Industry Development Board Malaysia (CIDB).
Analysis:
MEXIM is a leading example of a full-fledged ECA, offering the range of both conventional and
Islamic products, balancing myriad stakeholder needs and interests and delivering solid financial
results. Among other features, it has very clear vision and mission statements underpinned by a
solid corporate governance and accountability structure. It was designated by HR Asia one of the
Best Employers to Work for, thus ensuring a stable and professional workforce. Its client chart
promises prompt responses within well-defined turnaround times for each facility offered.
MEXIM has been rated A3 by Moody’s and A- by Fitch, which was the basis for issuing a US
dollar-denominated sukuk of USD300mn, for the purposes of expanding its Islamic banking
portfolio.