This study discusses the importance of export credits, their recent growth, and the trend toward more extensive reliance by official bilateral creditors on export credits as an instrument of financial support, and raises a number of issues regarding the role and limitations of export credit financing, espeically for economies in transition.

© 1995 International Monetary Fund

Reprinted May 1995

ISBN 9781557754486

ISSN 0258-7440

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  • Preface

  • I. Summary and Conclusions

    • Recent Trends

    • Current Issues

      • Mixed Credits

      • Limitations of Export Credits

      • Securitized Lending

    • Prospects

    • Structure of the Paper

  • II. Trends and Developments in Export Credits

    • Share of Export Credits in Debt Financing

    • Volume of New Export Credits

      • Background: The Contraction of Export Credits in the 1980s

      • Re-examination of Agencies’ Role

      • Rebound in the Volume of Export Credits

    • Financial Position of Export Credit Agencies

      • Net Cash Flow

      • Provisioning

  • III. Current Issues and Prospects

    • New Emphasis on Risk Assessment

      • Approaches to Risk Assessment

      • Criteria Used in Evaluating Risk

    • Limitations of Export Credit Financing

    • Low-Risk Markets and Competition Among Agencies

      • Agencies’ Reactions to Changes in the Policy Environment

      • Mixed Credits

    • Cover Policy in Countries Perceived as High Risk

      • Low-Income Rescheduling Countries

      • Responses to Debt and Debt-Service Reduction

    • Export Credits to the Private Sector

      • Issues

      • Prospects

    • Export Credit Financing for Transition Economies

      • Overall Views

      • Securitization Techniques—Escrow Accounts

      • Limitations of Export Credit Financing for Transition Economies

  • IV. Cover Policies

    • Links Between Risk Assessment and Cover Policy

    • General Stance of Agencies’ Cover Policies

    • Cover Policy for Major Export Credit Markets

      • China

      • Brazil

      • Mexico

      • Iran

      • Algeria

      • Other Major Markets

    • Cover Policies for Eastern Europe and Countries of the Former Soviet Union

  • Appendices

    • I. Glossary of Selected Terms Used in Officially Supported Export Credits

    • II. Technical Note on Export Credit Statistics

    • III. OECD Consensus on Export Credits

    • IV. Export Credit Agencies’ Policies Toward Rescheduling Countries

  • Boxes

  • Section

  • II.

    • 1. Fundamentals of Officially Supported Export Credits

    • 2. Institutional Framework of Officially Supported Export Credits

    • 3. Changing Approaches to Export Promotion

  • III.

    • 4. Sharing Risks

    • 5. Short-Term Credits

    • 6. Special Security Arrangements and the World Bank’s Negative Pledge Clause

  • IV.

    • 7. Instruments of Cover Policy

    • 8. Determination of Premium Levels

  • Tables

  • Section

  • II.

    • 1. Developing Countries and Economies in Transition: Composition of External Indebtedness, 1992

  • III.

    • 2. Summary of Short-Term Cover Policies of Export Credit Agencies Toward Selected Developing Countries, End-1993

    • 3. Summary of Medium- and Long-Term Cover Policies of Export Credit Agencies Toward Selected Developing Countries. End-1993

  • IV.

    • 4. Summary of Short-Term Cover Policies of Export Credit Agencies Toward Selected Economies in Transition, End-1993

    • 5. Summary of Medium- and Long-Term Cover Policies of Export Credit Agencies Toward Selected Economies in Transition. End-1993

  • Appendix Tables

    • A1. Flow of New Commitments of Officially Supported Medium- and Long-Term Export Credits

    • A2. Arrangement on Officially Supported Export Credits: Commercial Interest Reference Rates

    • A3. Status of Paris Club Rescheduling Countries (as of July 31, 1994)

  • Charts

  • Section

  • II.

    • 1. Composition of Debt Owed to Official Creditors, 1992

    • 2. Twenty Main Recipients of Export Credits: Share in Agencies’ Portfolio

    • 3. Officially Supported Export Credits: New Commitments

    • 4. Export Credit Exposure

    • 5. New Export Credit Commitments in Selected Major Markets

    • 6. Export Credit Agencies: Premium Income, Recoveries, Claims, and Net Cash Flow

  • III.

    • 7. Twenty Main Recipients of Export Credits: Share of Export Credits in Total Debt, 1992

  • IV.

    • 8. Cover Policy Indices

    • 9. Total Exposure in Top Five Markets

    • 10. Export Credit Exposure: China, Brazil, and Mexico

    • 11. Export Credit Exposure: Iran and Algeria

    • 12. Export Credit Exposure: Indonesia, Turkey, and Venezuela

    • 13. Export Credit Exposure: India. Philippines, and Nigeria

    • 14. Export Credit Exposure: Hungary and Bulgaria

    • 15. Export Credit Exposure: Russia and the Former U.S.S.R.

The following symbols have been used throughout this paper:

… to indicate that data are not available:

— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

– between years or months (e.g., 1991–92 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

/ between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice: the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.


This study is based on discussions with the export credit agencies and government authorities of eleven industrial countries in the period February to May 1994. Most of the discussions were attended by all of the authors, who are staff members of the Official Financing Operations Division in the Fund’s Policy Development and Review Department. Developments in officially supported export credits have been the subject of four earlier papers prepared by Fund staff. The most recent, “Officially Supported Export Credits: Developments and Prospects” was published in the World Economic and Financial Survey series in May 1990. The focus of this paper is on export credit financing for the developing countries and economies in transition. The paper examines the recent changes in the environment in which official export credit agencies operate, and discusses the potential and limits of export credit finance.

The agencies that participated in the present review were Österreichische Kontrollbank Aktiengesellschaft (OeKB), Austria; Office National du Ducroire (OND), Belgium; Export Development Corporation (EDC), Canada; Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE), France; Hermes Kreditversicherungs-AG (Hermes), Germany; Sezione Speciale per I’Assicurazione del Credito all’Esportazione (SACE), Italy; Export-Import Insurance Division, International Trade Policy Bureau, Ministry of International Trade and Industry (EID/MITI), Japan; The Export-Import Bank of Japan (Japan Eximbank), Japan; Nederlandsche Credietverzekering Maatschappij, N.V. (NCM), the Netherlands; Exportkreditnamnden (EKN), Sweden; Export Credits Guarantee Department (ECGD), United Kingdom; and the Export-Import Bank of the United States (U.S. Eximbank), USA. The guardian authorities of most of these agencies also participated in the discussions. The authors also had discussions with the Secretariat of the International Union of Credit and Investment Insurers (Berne Union) in London, with the Secretariat of the Organization for Economic Cooperation and Development (OECD) in Paris, with the staff of the Commission of the European Union in Brussels, and with World Bank staff. The generous cooperation of the agencies, the national authorities, and the staff of the organizations listed above is gratefully acknowledged.

Anthony R, Boote and Toshiyuki Kosugi made numerous helpful contributions to the paper. The paper has also benefited from comments by other staff members of the IMF, as well as by Executive Directors of the IMF. The descriptions of policies and practices and the discussion of issues reflect the views of the staff and should not be attributed to any individual agency or national government nor to the Management and Executive Directors of the IMF. The paper reflects information available through September 1994.

Secretarial assistance during the staff visits was ably provided by Lucia Hernandez; and considerable research assistance was provided by Hassanin Ismeail, both of the Policy Development and Review Department, The authors would also like to thank Sulochana Kamaldinni and Bogna Jezierska for their patient and meticulous work in processing the document. Simon Willson of the External Relations Department edited the manuscript and Elisa Diehl of the External Relations Department coordinated production.

Developments and Prospects