Improving the Role of Eximbanks/ECAs in the OIC Member States
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5. BEST PRACTICES OF ECAs
5.1. Introduction
This chapter discusses some best practices examples from the OIC ECAs and presents case
studies for five successful OIC ECAs. In addition, three non-OIC countries’ ECAs are also
reviewed.
The case studies below have been selected based on certain features of their operations and
approaches that are particularly noteworthy which are best practices within the OIC community
and globally that could serve as important lessons for other countries looking to enhance or
develop their ECAs.
5.2. OIC Case Studies
Within the OIC countries there exist some good examples of well-conceived, well-designed and
well-executed ECA programs. The following section provides five case studies from OIC countries
from which lessons can be drawn. The OIC case studies are Nigeria, Malaysia, Turkey, Indonesia
and Lebanon.
This section also looks at three OECD countries, New Zealand, Canada and Finland, each with
important experiences from which OIC countries can learn. These countries were selected as
they represent different business models, different operating philosophies and have features
which can usefully be adapted to OIC ECAs. New Zealand was chosen as it is a relatively new ECA
that adopted a “go-slow” and step-by-step approach to its establishment. The Finnish ECA was
chosen as it has a focused and disciplined approach to identifying and meeting the demands of
the market. The Canadian model is a sophisticated ECA offering all products and it offers lessons
for the more mature and well-managed OIC ECAs.
5.2.1. Nigeria
Sharp Focus On Specific SME Export Market
Nigeria’s economy is oil dependent, with over 97% of exports comprised of oil & gas and the
country’s main trading partners in order of importance are India, USA and Brazil followed by
Europe. Collectively the top three trading partners account for over 37 percent of total exports.
The needs of Nigeria’s export sector are predominantly serviced by the country’s banking sector.
Nigeria’s financial sector, includes bank and non-bank financial institutions such as micro-
finance banks, finance companies and development finance institutions. The banking sector is
dominated by 21 domestic commercial banks and several international banks including Citibank,
Stanbic IBTC and Standard Chartered Bank. There are also a few global credit insurance
companies including Coface, which provide trade credit insurance. These existing financial
services entities are focused on supporting corporates and do not cater to the country’s SME
sector which has the potential to drive export development. Most banks are more involved in
import loans and not exports.
Exporting SMEs in Nigeria face numerous growth constraints including those related to access to
finance. Most commercial banks are unwilling to service smaller clients, even for good risks,
given that the cost of administering loans, relative to the income, is high.