Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Bangkok Post
Bangkok Post
Business

Exim Bank promotes risk hedging amid choppy seas

Mr Rak says that the cooperation with Nippon Export and Investment Insurance (Nexi) is another mission of Exim Bank as a state-owned specialised financial institution under the supervision of the Ministry of Finance.

The lingering effects of the pandemic and the Russia-Ukraine war could exacerbate the risk of non-payment for goods, says Rak Vorrakitpokatorn, president of the Export-Import (Exim) Bank of Thailand.

As predicted by the world's leading insurance agencies, there could be a 14% annual uptick in the number of bankruptcies this year because of the effects of the prolonged pandemic and Russia-Ukraine hostilities, said Mr Rak.

He said firms trading overseas, particularly small businesses that have low negotiating power and little working capital, should manage the risk of non-payment of goods by shifting their export markets to those with high growth or increasing purchasing power, such as emerging markets along the Greater Mekong Subregion (GMS) or South Asia, while employing financial tools to manage such risks.

Exim Bank is collaborating with Nippon Export and Investment Insurance (Nexi) to provide risk hedging for Thai and Japanese entrepreneurs seeking to expand their trade channels.

"This cooperation with Nexi underlines our commitment to working with alliance agencies both at home and overseas to arm Thai entrepreneurs to act as economic warriors in world markets, while driving sustainable development in business and environmental terms," said Mr Rak.

He said the collaboration focuses on exchange of information and cooperation in development of financial tools, covering export credit and investment insurance, as well as reinsurance facilities, with a view to safeguarding Thai and Japanese entrepreneurs against international trade and investment risks.

Mr Rak said Exim Bank sees itself as working to improve people's well-being, developing infrastructure and public utilities with its credit facilities, while strengthening labour skills, exchange of know-how and technology transfers.

He said both Exim Bank and Nexi want to promote and support Thai and Japanese entrepreneurs that plan to expand abroad, particularly in countries along the GMS, where there is a similarity and familiarity of cultures and behaviours among consumers.

Exim Bank expects to promote exports and investments by filling in gaps in knowledge, opportunities and capital, making risk-hedging tools for international trade and investment more accessible, said Mr Rak.

The bank has operated an export credit insurance business since starting operations in 1994. It has recorded accumulated export credit insurance turnover of 1.82 trillion baht and total insurance claim payments of 1.4 billion baht.

Of the total claim payments, 76% were caused by foreign buyers' rejection of payment for goods, with 23% attributed to buyers' bankruptcies, while 1% was for buyers' rejection of delivered goods.

Countries with the highest claim values are the United Arab Emirates, the US and Singapore. The products with the highest claim values are rice, jewellery and accessories, and aluminium.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.