Export-Import Bank of the United States (Ex-Im Bank) Explained
The Export-Import Bank of United States (Ex-Im Bank) is the official US bank specialized as an export credit agency (ECA). An ECA is an official entity that was established with the aim to financially assist companies in the USA that want to do business in emerging markets. An Export Credit Agency (ECA) helps companies export to other countries by providing loans, guarantees, insurance, and other credit facilities.
A Little More on the Export-Import Bank of the United States
The Ex-Im Bank was established in 1934 by Congress. It is a public body operated under a congressional charter. Its performance is periodically reviewed by congress.
The main purpose behind establishing the Ex-Im Bank was to increase exports of US goods to other countries around the world and to support job creation through exports. Unlike other agencies, which operate at the cost of taxpayers, the Ex-Im Bank is a self-sustaining federal body which follows comprehensive and prudent risk management practices.
Unlike private banks which often do not accept commercial or political risk associated with business in other countries, the Export-Import Bank (Ex-Im Bank) is unique in it practices. It is willing to accept political (war, terrorism, riots and revolution etc.) and commercial risk associated with doing business in foreign country.
The Export-Import Bank (Ex-Im Bank) acts as an agent on behalf of American exporters. It provides a working capital, export assistance, and guarantees of letter of credit (LOC) issued by foreign buyers. Globally, there are around 96 Export Credit Agency (ECA) which promotes export of their home countries.