The EXIM Bank (EXIM) was established in May 1986 as Jamaica’s premier trade financing institution and the Caribbean’s first Export-Import Bank. Over the years, the Bank has made sure to honour its mandate of helping businesses become viable and competitive in international markets. Whilst the Bank’s initial focus was about the provision of financial services to export and import related businesses, EXIM recognized that linkage companies that are connected to export and manufacturing entities play a vital role in the growth of the economy. Accordingly, the bank has expanded its focus to include linkage companies.
Technology is defined as the purposeful application of information in the design, production, and utilization of goods and services, and in the organization of human activities.
From inception, the EXIM Bank recognized that investment in technology represents a significant investment on the part of any business. The right technology should add value (through increased revenue), greater efficiencies (reduce costs) and better standardization (compliance). The Bank’s mission has in turn guided the creation of financial products that have allowed it to be creative and innovative in the provision of financing options where technology is either a product or a service.
EXIM has provided financing for equipment acquisition (quilting machines, automated bottling and labeling plants and high tech printers) to entities in the following sectors; manufacturing, printing and packaging, mining and agro-processing, occasionally using the equipment purchased as collateral for the loan. Loans are typically offered for a maximum period of four years with the option of a six month moratorium on the principal payments (Modernization Fund for Exporters or SME Growth Initiative Loans). The novel approach of using the equipment as collateral not only allows the company to unlock the potential for which the technology was designed but to also unleash the inherent capital in the equipment purchased.
For some entities in the tech sector, the service offered is the product and as such technology is the product. Tech companies are notable for many things, one of which is the absence of tangible collateral to secure financing. The EXIM Bank’s response to this emerging field is to offer a financial solution, Trade Credit Insurance, that on one hand provides insurance against non-payment of receivables (critical when business is being established with an unknown entity) and on the other, collateral so the receivable can be discounted up to a maximum of 80% by way of a working capital loan (Insurance Premium Discount Facility). The aforementioned financial solution allows for the timely provision of working capital, which is the lifeblood of any business. To date the EXIM Bank has provided financing to companies in; animation, software development, research and development and to companies providing service to Digicel, Lime and Flow.
As an approved financial intermediary of the Development Bank of Jamaica (DBJ), the EXIM Bank is able to access the DBJ’s Credit Enhancement Facility to provide a partial guarantee of up to 50% of the loan amount up to a maximum of J$15.00m in instances where the loan cannot be fully collateralized by the borrower. This facility is a game changer as it marks a departure from loans being declined due to the absence of collateral.
The EXIM Bank is committed to supporting the technology sector and companies with technology related needs through innovative and creative financing solutions.