Agency Director Calls Bank Hidden Asset for Business
BY MANDY JACKSON
The Export-Import Bank of the United States has helped local companies export their products, and it may play a role in the reconstruction of Afghanistan, according to one of its board members.
Ex-Im Bank Director Dan Renberg stopped in San Diego on March 13 during a four-day California tour. While here, he spoke with students, bankers and two local companies.
Renberg addressed students and faculty at the University of San Diego, saying the bank is “one of the most well-kept secrets in the U.S. government.”
The Ex-Im Bank is an independent U.S. government agency based in Washington, D.C., that helps finance the sale of U.S. exports, mostly in developing countries, by providing loans, guarantees and insurance. The Ex-Im Bank, with an annual program budget of $727 million and administrative budget of $63 million from the U.S. government, charges an exposure fee for its services.
The bank has seven branch offices, three of which are in California: Newport Beach, Long Beach and San Francisco.
“We sustain and create jobs by giving money to U.S. exporters and foreign buyers,” Renberg said. When the bank makes it possible for Boeing to sell an airplane overseas, he said, it not only creates jobs at Boeing, but also at the approximately 3,000 subcontracting companies that will contribute to the airplane’s construction.
President George W. Bush sees a use for the Ex-Im Bank in bringing countries together through trade, Renberg said, particularly in Central Asian countries like Afghanistan and Pakistan after Sept. 11.
The Ex-Im Bank is able to contribute to Afghanistan’s reconstruction by helping companies or the government in Afghanistan with loans for buying U.S. products.
The bank sells export credit insurance, which helps U.S. companies lessen the risk of selling their products overseas and enables them to get financing from private institutions. The insurance costs exporters about 65 cents for every $100 of exports.
Before his presentation at USD, Renberg met with representatives of Sensa by Willat, a Carlsbad-based maker of silicon gel pens, and an Ex-Im Bank customer.
By purchasing export credit insurance, Sensa could sell its pens to more distributors overseas, Renberg said. He met with company officials last week to help them identify ways of expanding into new foreign markets.
Kim Benson is vice president of Cange International Inc., a local export management company and international business-consulting firm based in Rancho Bernardo.
Benson and Cange International president Bob Cange both worked as senior marketing representatives for the export credit insurance division of the Ex-Im Bank in Long Beach before starting their business.
Cange International frequently recommends its clients use Ex-Im Bank programs. Ex-Im Bank’s export credit insurance policy not only assists exporters in mitigating the risk of nonpayment, it can also be used for marketing purposes, Benson said.
With an export credit insurance policy in place, a U.S. exporter can extend longer credit terms to international customers without increasing risk, she said. That allows the U.S. exporter to compete more aggressively and successfully in the international marketplace.
Renberg said the biggest challenge for the Ex-Im Bank is to educate U.S. companies about how to utilize its financing services.
“There are companies who need us, but don’t know about us,” he said.
The Ex-Im bank also provides loans to foreign buyers of U.S. products, or acts as a guarantor when they obtain loans from a private bank.
In Mexico, medium-term lines of credit are available to buyers of U.S. products at interest rates of 25 percent or more. Through the Ex-Im Bank, Mexican buyers can obtain medium-term loans with as low as 5 percent interest. Minimal fees would bring the interest rate up to 5.5 to 6.5 percent.
Renberg said the agency is working with Mexican bank Nacional Financiera, to extend loans guaranteed by the Ex-Im Bank to small- to medium-sized Mexican enterprises buying U.S. products.
“Under presidents Bush and (Vicente) Fox, we’ve made new inroads in Mexico,” Renberg said. In 2001, the agency supported $995 million worth of exports to Mexico and $12.5 billion worth of exports worldwide.
Commercial lenders pulled away from the market after the terrorist attacks, leaving some exporters without a line of credit. Renberg said the Ex-Im Bank has always seen a lot of interest from small U.S. companies in its programs, but mid-sized and larger companies have shown more interest after Sept. 11.
“We’re pleased that more companies are knowing about us,” he said. “It’s going to be a good year for the Ex-Im Bank.”