US Exim Bank ready to hear from SMEs


Cape Town - Apart from its involvement in large financing deals in Africa, the Export Import Bank of the United States (Exim Bank) is placing an increasing focus on small and medium enterprises (SMEs), according to Fred Hochberg, chair of Exim Bank.

Exim Bank is an independent federal agency and maintains US jobs by filling gaps in private sector financing at no cost to US taxpayers. The bank provides a variety of financing, including working capital guarantees and export credit insurance, to promote the sale of US goods and services abroad. Almost 90% of its transactions directly serve US small businesses.

Hochberg was in SA recently to speak at a Bloomberg summit and told Fin24 that the bank is aware that SMEs often have a difficulty accessing finance.

"We try to enable SMEs to obtain access to finance and also to be able to trade among each other," said Hochberg. "We offer a commercial service to connect SMEs with local markets and to access finance for overseas sales."

In sub-Saharan Africa (SSA), Exim Bank is very active and has been mandated by the US Congress to focus on the region. This is because the US is actually looking to do more business in SSA. Currently only about 1% of US exports go to SSA.

"We would like to ensure that companies understand that financing is available to increase trade. And for increased trade, more infrastructure is needed," explained Hochberg.

"There is a huge potential, but infrastructure is needed to capitalise on it."

He added that the current situation with commodity prices in the world, is actually opening up opportunities for economies to rethink themselves and to diversify the economy and make it sustainable in the long run. In his view, the current commodity situation could even lead to faster change and diversification due to the imperative it brings to act.

So far Exim Bank has supported about 150 SMEs exporting to South Africa and Africa, for instance. This is because of the belief in the importance of building a strong middle class on the continent.

"We can also help the customers of SMEs with enhanced credit to purchase from US companies," said Hochberg. This includes offering 60, 90 or even 120 day terms as well as offering deals in rand terms.

Lastly, Hochberg pointed out that under President Barack Obama Exim Bank has supported 23% more exports to SSA than during the combined 16 years of President Bill Clinton and President George W. Bush.

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
I'm not really directly affected
18% - 2063 votes
I am taking a hit, but should be able to recover in the next year
23% - 2673 votes
My finances have been devastated
35% - 4026 votes
It's still too early to know what the full effect will be
25% - 2886 votes