Exim in collaboration deal with Japanese reinsurer

Apichai Boontherawara, president of Exim Bank, yesterday signed a reinsurance agreement with Fumihiko Kato, vice chairman of Nexi.

Apichai said Exim and Nexi would roughly share equal risk arising from exportcredit insurance contracts that Exim has with its clients, while Nexi would act as reinsurer.

In the event of importers defaulting on payments due to commercial or political risk, Exim will pay compensation of up to 90 per cent of the loss incurred to exporters based in Thailand.

Apichai said Exim had an exportcredit insurance portfolio currently worth Bt13 billion. "We expect to double it by the end of this year," he added.

Several banks have already signed agreements with Exim, including Kasikornbank and the Islamic Bank of Thailand. Bangkok Bank and Siam Commercial Bank are also expected to do business, he said.

However, few Japanese firms have done business with the institution, he said.

As the world economy has not yet fully recovered, exporters face a high risk of payment default, particularly in new export markets such as Africa and the Middle East.

Kato said the agreement would support the supply chain in Thailand. The Middle East is one of the major markets for Japanese firms, which export parts for power plants and electronics products to the region.

Deputy Finance Minister Pruttichai Damrongrat praised the collaboration as an important step in creating jobs and maintaining Japanese investment in the country.

There are about 1,500 Japanese firms operating in Thailand, making the Kingdom the biggest Japanese investment base in Southeast Asia.