TFG spoke to Stephen Renna, Chief Banking Officer at US Exim Bank at TXF CPRI in London, about the core priorities and focus for the bank in order to facilitate US exports, now that is has a wider remit to promote US SMEs.
Featuring: Stephen Renna, Chief Banking Officer, US Exim Bank
Host: Deepesh Patel, Editor, Trade Finance Global
Thank you for joining us on Trade Finance Talks TV. Who are you and what do you do?
I’m the Chief Banking Officer at US Export-Import Bank. As Chief Banking Officer I’m responsible for all our lending products – essentially loan guarantees and direct loans as well as export credit insurance. And I am an appointee of the Trump administration to this position. I spent the prior two years at the Department of Commerce also as an appointee helping US companies that were seeking to win foreign government procurements.
US EXIM Bank – Facilitating Trade for US Exporters
What does US Exim Bank do?
The US Exim Bank facilitates US exports by providing credit support to foreign buyers of the US product or services and we provide that by a guarantee to a bank or other different types of products that we have that enable the borrower buyer to be more creditworthy.
In the current time of geopolitical uncertainty in the US, what’s the focus for US Exim Bank and how are you helping US Exporters continue to grow their trade lines?
In this current international environment, it’s extremely competitive for US companies to be able to do business in or do business with companies or other countries around the world. It’s a highly competitive international marketplace. In order for US companies to be competitive, they need to be able to provide financing, whatever it is they’re trying to sell. Often, the buyers for these products or services are in lesser developed countries economically and therefore they don’t have the creditworthiness necessary in order to borrow at market rates through the private capital markets. So we provide through guarantees support to that buyer so that they can get the financing. This provides US companies with a comparable competitive edge to their foreign competitors that they are trying to sell products around the world.
Key Priorities of US EXIM Bank for 2020
US Exim has now extended its ability to finance US SMEs by lifting the cap from 10m – 25m. Is the bank putting its foot on the gas now?
Well, what you’re referring to is that up until the amount was changed from $10 million to $25. That’s what we called our delegated authority. And that basically says to banks that, you have an authority to make loans, and most of them are short term loans or working capital guarantees or export credit insurance, up to the amount of $25 million without needing the approval of our board for those transactions. That’s what’s significant about it, and what we’re trying to do is make sure that we are responsive to the small-medium enterprises in the United States and providing them with the products they need at the level that they need in order to compete. And we’re also providing the banks who are our partners in this because they’re essentially our proxy out there. They’ve got the authority that we’ve delegated them to provide these products to small business exporters, and so that they’re doing that and we’re trying to give them the headroom that they need in order to execute efficiently and effectively.
What are the key priorities for US Exim Bank in 2020?
SR: First is to make sure we get reauthorized long term, but that’s in Congress’s hands right now. We’re very excited that we’re going to be reauthorized for another extended period. Therefore, our first priority is to make sure that industries understand that we’re open for business and what type of business assistance we can provide to companies on their goods and services, whether they be sales of equipment or sales of services or development of projects around the world. We need to make sure that businesses across the board in all different sectors understand what we can do with them. A second priority is to make sure that what we can provide businesses matches up with what they need to compete in the current day marketplace. We need to make sure that our product line has been modernised and has evolved to what our clients meaning American exporters, need. Also per mandates from Congress, we’re looking to increase our engagement with small businesses. We’re looking to increase our involvement in Sub Saharan Africa and we’re also looking to increase our support for energy-efficient types of fuels.