06 September 2010 12:44PM

New support field explored

19 Jul 10 ,  Bangkok Post
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The Export-Import Bank of Thailand wants to expand beyond trade-related lending to offer financial support across the value chain of key export segments.

 

Somporn Chitphentom, a senior executive vice-president, said sectors such as logistics and energy played a key role in the cost structure of Thai exporters. Reducing funding expenses for the value chain should also lift their competitiveness, particularly considering that logistics costs in Thailand are estimated to be as high as 20% of GDP, or more than double that of more developed economies less reliant on road transport.

 

In terms of energy, Exim wants to play an active role in supporting carbon credit projects.

 

While still in their infancy in Thailand, carbon credit programmes could grow rapidly as developed countries look to meet their commitments through investments in green projects.

 

Exim Bank will also look to finance cross-border projects that help facilitate exporters' logistics systems, such as creation of economic corridors across Southeast Asia through expanded road links to neighbouring countries.

 

"Normally, Exim Bank would be looking long term, but right now it's still focusing on short-term working capital due to customer demand," said Mr Somporn.

 

He said that following the 1997 economic crisis, Exim Bank played a key role in providing working capital to exporters after commercial banks cut back lending due to greater risk aversion. As a result, it saw its short-term facilities jump 120%.

The bank's portfolio is now evenly split between long- and short-term loans. However, long-term loans are expected to make up 60% of its total credit portfolio within the next two years.

 

He said Exim Bank would also continue its modernisation programmes, including a new zoning system for its 15 branches, to help improve efficiency in managing client relationships with the bank's 3,000-plus customers.

 

Each branch will be tasked with overseeing loan clients with outstanding amounts of up to 500 million baht, with larger relationships to be managed directly by the head office.

 

Outstanding loans at Exim Bank are expected to rise to 60 billion by year-end.

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