Exim to fund small exporters
Written by changthai11 on Friday, September 12th, 2008
.BANKING
Exim to fund small exporters
PARISTA YUTHAMANOP
The Export-Import Bank of Thailand should try harder to offer credit to small and medium-sized exporters, said Pichai Naripthaphan, a caretaker deputy finance minister. He added that Exim had adopted the right policy in being a niche bank in financing infrastructure projects, but that its lending growth to small and medium-sized enterprises was too low.
The Finance Ministry has also requested Exim to book loans to SMEs in public service accounts to separate losses from responding to government policies from other loans, Mr Pichai said.
”Loans to SMEs can easily become non-performing. We want Exim to book such loans in a separate account to show the estimated losses and funding costs of such lending,” he said.
Other strategies to promote lending to SMEs include launching an online service for easy access.
The structure of the export sector has concentrated on large-sized companies, which contribute 90% of total export value. Exports by SMEs have also decreased since the 1997 economic crisis.
In promoting lending to SMEs, Mr Pichai said the government is protecting them from the impact of tighter credit.
”As the banking system’s liquidity is tightening and commercial banks are more reluctant to lend, Exim Bank should fill the gap,” he said. ”Exim’s loan portfolio should have been 100 billion baht rather than 50 billion, given that it looks at large-scale infrastructure projects.”
But he said the ministry agreed with Exim’s move to take part in syndicated loans to infrastructure projects in neighbouring countries.
Exim recorded a lower-than-expected net profit of 58 million baht in the first half of the year. It had 59.5 billion baht in total assets, including 52.1 billion baht in its loan and interest portfolio in the first half of 2008.The bank approved 10.89 billion baht in new credit and export credit insurance and committed to 4.4 billion baht in credit lines in the first half.
Of its total lending in the first half of the year, 1.5 billion baht went to infrastructure and logistics projects, 100 million baht to promoting alternative energy and 3.7 billion baht to exporters’ machinery imports.
Exim’s lending in export credit insurance totalled 1.39 billion baht in the first half of the year. Exim formed a syndicated loan with the Asian Development Bank, Gramercy Advisors/Arco Capital Management Family of Funds and the Foreign Trade Bank in Cambodia worth US$20 million to finance a power transmission line project in Cambodia.
