EXIM Bank focuses on niche markets, targets 11% loan growth

KUALA LUMPUR : Export-Import Bank of Malaysia Bhd (EXIM Bank) does not expect the increasing offerings of trade facilities by other commercial banks to eat into its business, and is targeting to lend out some RM3.33 billion this year, an 11% increase from RM3 billion it disbursed in 2006.

Its managing director and chief executive officer Datuk Kamal Mohd Ali told The Edge Financial Daily that the loan growth target was premised on its strength in the non-traditional markets, which were “not rated” by other commercial banks.

“We are supporting Malaysian exporters to do trades within our forte. We are not directly competing with the commercial banks. We have our niche markets.

“These Malaysians do trades in exotic countries which commercial banks would not able to go due to higher risks.

“But EXIM Bank is mandated to assist these exporters. That is our strength,” he said after the signing of a placement agreement for MalaysiaKitchen Financing Facility (MKFF) between the government and EXIM Bank here yesterday.

Apart from its strong footing in non-traditional markets, Kamal added that its existing and newly launched products would help drive the loan growth.

EXIM Bank, wholly-owned by the government, provides credit facilities to finance and support exports and imports of goods, services and overseas projects. It also offers export credit insurance services, export financing insurance, overseas investment insurance and guarantee facilities.

At the event yesterday, the government allocated the MKFF fund, amounting to RM180 million, to EXIM Bank, to assist Malaysian entrepreneurs in obtaining credit and financing facilities to set up or expand restaurants overseas.

The financing is offered to any interested Malaysian entrepreneurs, who have at least one year working experience in an overseas restaurant or three years’ experience in Malaysia.

There will be no limitation to the amount of financing one can apply for, provided that the restaurants are 70% owned by Malaysians. EXIM Bank will provide loans of up to 90% of the total cost needed, at an interest rate of 3% per annum.

Deputy Finance Minister Datuk Ng Yen Yen, who witnessed the signing ceremony, said the purpose of the fund was to promote Malaysian agricultural products and help develop more “Malaysian kitchens” abroad.

She said the government expected the MKFF to help grow the number of Malaysian kitchens overseas to 8,000 by 2015, from 400 now, adding that it would consider increasing the fund size of MKFF in the future.

By “Malaysian kitchens”, she meant 70% of the food sold in these restaurants must be Malaysian signature dishes, and 10% to 15% of the space in the restaurant must be allocated for display of Malaysian craft and fashion, among others.

Kamal said the bank had so far received 15 applications for loans amounting to some RM70 million under MKFF, and that it had given approvals in-principle to lend out a total of RM20 million to five of these applicants.

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