What is the Export-Import Bank of the United States (EXIM)?
The Export-Import Bank of the United States (EXIM) is the official US export credit agency (ECA), a public agency that provides loans, guarantees, and insurance to limit the risk of domestic companies selling goods and services in foreign markets. is. ..
- The Export-Import Bank (EXIM) is a US export credit agency whose mission is to promote international trade by US companies by funding import and export operations.
- EXIM provides financial and insurance services to support US operations in countries where private financing is difficult or impossible due to geopolitical or commercial risks.
- The loan, loan guarantee, and insurance are given to foreign buyers to fund the purchase of goods from US exporters.
Understand the Export-Import Bank of the United States (EXIM)
EXIM was created in 1934 and operates under a charter that is regularly reviewed by Parliament. This is a federal agency that supports the work of the United States by promoting the export of goods and services.
Banks generate income from interest and fees and have donated $ 9.5 billion to government funding since 1992. Risk management is prudent and the default rate as of June 30, 2021 is reported to be 1.555%.
Rather than competing with private sector lending, agencies aim to accept the types of country risk (political or commercial) that private companies cannot or do not want to undertake. EXIM provides trade finance solutions such as insurance against foreign defaults, working capital guarantees, letter of credit guarantees provided by foreign banks, and loans offered to potential export buyers. Domestic companies can also borrow loans backed by foreign debt and foreign assets.
With around 116 ECAs around the world supporting domestic exporters, banks believe they are agents that help level the competition for US exporters. EXIM provides the competitiveness of US products by funding foreign buyers to purchase US exports, especially in the global market where foreign competitors enjoy support from their own ECA. I am aiming to improve it.
Benefits of the US Export-Import Bank (EXIM)
Banks are important for small businesses. The credit and guarantees it provides help small exporters expand into new and higher risk markets. In fiscal year 2020 (FY), nearly 90% of bank transactions benefited small exporters. EXIM has approved nearly $ 5.4 billion in direct loans, loan guarantees and export credit insurance to support $ 10.8 billion in exports and the employment of an estimated 37,000 people.
The agency claims to have supported 144,000 jobs each year since 2009.
Last year, EXIM provided $ 8.2 billion in short-term export credit and working capital guarantees, supporting $ 9.1 billion in exports and an estimated 34,000 jobs.
The bank is headed by a five-member board of directors (B of D) representing both political parties. Board members are appointed by the President of the United States and confirmed by the Senate.
The board requires a quorum of at least three members to do business, approve transactions, and develop policies. The agency lacked a B of D quorum between July 2015 and May 2019, but as of 2021, banks have returned to “full funding capacity.”