Ex-Im grows loan portfolio 35%
THE National Export-Import Bank of Jamaica (Ex-Im) reported a 35 per cent increase in its loan portfolio during the 2008/2009 financial year.
The bank increased its loan usage — local and foreign — from $4.8 billion at the end of the previous fiscal year to $6.5 billion during the year under review.
“This performance was particularly gratifying, as the Bank faced numerous challenges during the period, most notable of which was the unprecedented financial crisis which affected banks and other financial institutions globally,” the bank’s annual report for the period said.
The report, which was tabled recently in the House of Representatives, outlined that the year marked the successful continuation of the bank’s three-year strategic plan (2008-2010), which included the implementation of a number of initiatives to prepare for future challenges, and to maintain a viable and sustainable organisation.
In response to demand for export credit insurance, Ex-Im launched its Trade Credit Insurance (TCI), in the first quarter of the review year to provide insurance protection against commercial risks of non-payment by foreign and local buyers.
The policy covers 86 per cent of the loss amount associated with commercial risk and 90 per cent of political risk.
Political risk refers to the risk of loss caused by changes in a country’s political structure or policies, such as tax laws, tariffs, or restriction in repatriation of profits.
Meanwhile, the Ex-Im Bank also experienced its own challenges, chief of which was the difficulty in sourcing lowcost Jamaican dollar funds to meet the expanded demands of its customers.
“Resulting from the funding limitation, the Bank was forced to curtail its lending activities during the second half of the financial year,” the report said.
Several initiatives were pursued to obtain funding at competitive rates of interest.
Those included securing additional loan funds of $1 billion from PetroCaribe and another $38 million from the National Insurance Fund, after having fully disbursed the $100 million it received in 2008.
