MINSK, 12 October (BelTA) – Export agencies can reduce the cost of loans in project financing. The statement was made by Yelena Mashnina, Head of the Central Office for Banking Oversight, member of the Board of the National Bank of the Republic of Belarus (NBRB), during the roundtable session held in BelTA's press center on 12 October to discuss the role of export and credit insurance in the Belarusian economy.
According to Yelena Mashnina, the operation of export support agencies is a widespread practice in the world. “Naturally the practice should be encouraged in Belarus as well, including with assistance of the central bank,” stressed the official. “Since the choice of instruments available from agencies like EXIAR can hedge risks, by encouraging operations involving export agencies we can reduce the risks the banking industry faces. It is a number one task for us as a regulator.”
If export support agencies are involved in financing a project, banks can safely reduce their risk premium, which makes part of the interest rate on a loan for the sake of compensating for possible risks. Yelena Mashnina explained: “If export agencies provide guarantees, then the level of potential risks that banks face gets lower and companies operate more effectively because the prime cost of the products they make will be lower thanks to the lower interest rates on loans.”
The NBRB representative mentioned a number of arguments in favor of agencies like EXIAR and Eximgarant of Belarus operating on the financial services market. First, if banks are to finance projects with assistance of export support agencies, then the volume of active operations of the banks rises, testifying to their stronger standing on the banking services market. Second, taking part in successful international projects is beneficial for the reputation of companies and banks. They get recognized outside the country, which is undoubtedly extremely useful in conditions of globalizing financial markets and the desire of Belarusian companies and banks to reach those markets.
The expert noted that every Belarusian bank is aware of export loan insurance programs. “But it seems to me that raising the awareness of bank clients about such programs is the way to go,” she said. “Banks are not always diligent in promoting new products. They often limit their efforts to more conventional forms of financing investment projects.” It is particularly true for the regions, specified Yelena Mashnina.
Andrei Dovnarovich, Director for International Development of the EXIAR representative office in Belarus, noted that the Belarusian office arranges specialized seminars. “Under the aegis of the National Bank we have held an educational seminar for representatives of all Belarusian banks to tell them about new opportunities for raising investments and financing projects on preferential terms by resorting to EXIAR's instruments,” he noted. “Close attention is paid to directly informing top executives of Belarusian companies about our products and ways to optimize the structure of deals, reduce risks and get money on more preferential terms,” said Andrei Dovnarovich.
