Crisis puts heat on EFIC - Australian Export Finance Insurance Corp

Business Asia, April 5, 1999

Exposure to Asia's financial crisis, especially in Indonesia, has put pressure on the profit line of Australia's main underwriter of exports.

The Australian Export Finance Insurance Corporation (EFIC) reported a loss in 1998 -- its first since 1991.

In the 1997-98 financial year, EFIC reported a loss of A$9.5 million compared with a profit of A$43 million in 1996-97.

EFIC is an agency of the Australian Government which underwrites finance for exports.

Asia's impact on the company is unavoidable, given that the bulk of its operations are in countries such as Indonesia (23 per cent), Malaysia, South Korea and Thailand.

Among the agency's projects is its role as a financing facility for Indonesian exporters.

Trade financing facilities signed by the Indonesian Government include funds of $US1.2 billion placed in 12 banks by Bank Indonesia, US$120 million from EFIC, US$1 billion from Japan Exim Bank, US$400 million from GSM-102 of the United States, and US$160 million from the Canada Wheat Board.

Non-payment by Asian companies has been one of the principle concerns for EFIC in assisting Australian companies. The agency also recently urged exporters to the Middle East to take export insurance against non-payment.

To assist exporters, EFIC has launched a new Web site.

Exporters can lodge export declarations directly from the Web site and clients can register for a fortnightly newsletter that addresses economic events and their credit risk implications.

There is also access to industry information, media releases and information about EFIC.

The address is http://www.efic.gov.au