A two-days interactive workshops on Ghana EximBank (GEXIM), and credit guarantees.
Speaking at the official opening of the workshops on 2-day credit guarantees, the CEO of GEXIM, Mr. Lawrence Agyinsam, hinted that this was pursuant to government’s agenda to make Ghana an export led economy.
The mandate of GEXIM is to support and develop directly and indirectly trade between Ghana and other countries, and to build Ghana’s competitiveness in the international marketplace.
According to him, GEXIM performs its mandate by providing trade finance facilities classified into funded and non-funded, export capability creation facilities, and research and advisory services to exporters.
He noted that GEXIM also facilitate the flow of credit from banks to exporters and other businesses through guarantee issuance, which is focus of the meeting today.
Access to credit by businesses is challenged by the promoter’s inability to provide adequate and acceptable collateral to banks. Many businesses have therefore not been able to expand to take advantage of economies of scale or switch to modern technologically way of doing business thus, making them uncompetitive whilst others may have even collapsed.
The situation is equally dire for exporters who are unable to meet export orders due to inadequate finance as well as manufacturers and processors who are unable to expand through the acquisition of modern equipment.
“I am sure you would agree with me that actors along the agricultural value chain are the are the worst affected” he stressed.
The concerns of inadequate collateral and to facilitate the flow of credit to businesses, GEXIM has, as one of its guarantee products, the credit guarantee, issued in favour of banks and on behalf of client as risk sharing and mitigation tool aimed at providing comfort to banks in case there is default.
It is worth noting that GEXIM is not a commercial bank and therefore not in competition with any bank for its customers but rather plays the role as a facilitator by collaborating with the banks through the issuance of credit guarantees to enable the banks advance credit to clients that have viable businesses.
Moreover, GEXIM is well positioned to facilitate international trade. The GEXIM mandate requires the bank to provide financial support to Ghanaian exporters to enhance their capacity to effectively participate in international trade.Credityinsam mentioned that GEXIM is therefore required to provide trade finance support and export capacity development for Ghanaian exporters.
“We provide direct lending and also support by way of guarantees to financial institutions that are willing and ready to provide financial support to Ghanaian exporters in projects GEXIM has decided to support”he lamented.
In particular, with the coming into being of the African Continental Free Trade Area (AfCFTA) and the emphasis on supporting intra-African trade, the Board and Management of GEXIM have committed to actively seek collaboration and partnership with the financial institutions in Ghana to provide the needed support to the exporters.
On the international front, GEXIM is a member of the Bernie Union, which has given it the opportunity to form strategic alliances with other Exim Banks and Export Credit Agencies across the world.
This, in addition to the fact that Ghana has signed up to the African Trade Insurance, GEXIM would like to leverage the funding support that financial institutions can provide to the Ghanaian exporters through guarantees and related services.
According to him, the expected collaboration is in two fold:The first instance is what they have described above, where the partner banks apply to us for a Credit Guarantee in support of their customers who need funding for bankable projects but may not have adequate collateral.
The second instance is when GEXIM is when GEXIM refers the customers to its partnership banks for funding of bankable projects for us to provide the requisite Credit Guarantee.
“To enhance this collaborated we have deemed it proper to engage selected banks to discuss how we can collaborate effectively and also discuss the General Terms and Conditions governing the issuance of Credit Guarantee as well as an MOU (to be signed with the partner banks) for your input and feedback to fine-tune these two documents” he hinted.
He said GEXIM seek to encourage all present to participate fully in this workshop, to provide input and feedback for smooth operationalization of this collaboration for the mutual benefit, and to build the capacity of businesses in Ghana to become competitive especially in international trade.
BY JOSEPH NANA YAW COBBINA