What is the Export-Import bank of the United States (EXIM)

EXIM stands for Export-Import Bank of the United States, and is the official export credit agency of the US. The EXIM provides export businesses with financing and assistance necessary to compete globally.

In this article we will define EXIM and learn the functions carried out by the bank.

About the Export-Import Bank of the United States

The Export-Import Bank of the United States or EXIM was established under US President Franklin D. Roosevelt in 1934, with a goal “to aid in financing and to facilitate exports and imports and the exchange of commodities between the United States and other nations or the agencies or nationals thereof.” The bank became an independent agency in 1945.

According to its official website, the Export-Import Bank conducted its first transaction in 1935 with  a $3.8m loan to Cuba. In the past, the bank has financed post World War II reconstruction and the 30,000km-long Pan-American highway, among other historic projects.

What does the Export-Import Bank of the United States (EXIM) do?

EXIM provides trade financing services to businesses exporting US goods and services. Its financing services include guarantees of commercial loans to foreign buyers, export credit insurance and working capital guarantees.

US businesses can protect themselves against events of non-payment by a foreign buyer via EXIM’s export credit insurance policy. According to its website, an insurance company or the US government will reimburse the business a portion of the loss if a foreign buyer fails to pay due to unforeseen commercial circumstances like bankruptcies or political risks including wars.

Insured businesses will be reimbursed 85% to 95% of their invoice amount should a foreign buyer default on payments. With EXIM’s Export Credit Insurance backing businesses, US exporters can confidently expand into new markets.

EXIM works with private lenders to help businesses secure funding for international sales. EXIM provides lenders with guarantees to repay a percentage of the loan if the borrower defaults. Businesses can use EXIM’s Working Capital Loan Guarantee to meet foreign buyer’s demand for performance bonds.

“EXIM doesn’t replace your private bank; it simply backs their loan and increases your borrowing power,” the Export-Import Bank says on its website.

US businesses can also borrow against their inventories and accounts receivable under EXIM’s schemes. EXIM also provides loans to foreign buyers who might find borrowing rates expensive in their home countries. 

EXIM and its board

The Export-Import Bank of the United States is led by a five-member board comprising of a bank president, first vice-president and three other members. The bank president serves as the chair of the board while the first vice-president serves as the vice-chair. 

Members of the board of EXIM are appointed by the president of the US with the consent of the Senate. The board members serve terms up to four years.

As of 24 March 2022, Reta Jo Lewis is the current president and chair of the Export-Import Bank of the United States. Lewis was appointed as the head of the bank in February 2021.