Export Credit Agencies (ECAs), are entities that offer export credit insurance, guarantees or financing arrangements which enables a foreign buyer of exported goods and/or services to defer payment over a period. Export credit terms are generally divided into short-term, medium-term (usually two to five years repayment) and long-term (usually over five years). However, ECAs in developing countries also offer domestic credit insurance, construction related guarantees and short-term trade finance.

ECAs are ordinarily wholly and directly owned by central governments, with some exceptions where such holding would be through a local authority or a state-owned enterprise. Instances of privately owned ECAs are very rare and limited to an agency set up where the private ‘owner’ is contracted to act in the interest of a government. 84% of Berne Union members, an International Union of Credit and Investment Insurers formed in 1934 are ECAs directly owned by governments,11% are private companies and 5% are owned by multilateral institutions (e.g. African Development Bank). BECI is a member of Berne Union.

Role of ECAs

ECAs have a primary focus on boosting exports and facilitating trade credit and in so doing, achieve a range of other objectives of national importance, including the facilitation of expansion of businesses and employment creation, improve international competitiveness, increase exports, strengthen the balance of payments and promote economic diversification. Specifically, ECA’s perform the following three basic functions;

  • Firstly, ECAs provide financing to foreign buyers when private lenders cannot or will not finance those export sales, even with the risks removed.
  • Secondly, and perhaps their most important function, ECAs assume risks beyond those that can be assumed by private lenders. Political risks, which refers to those events that occur due to political actions taken by the government that impact payment by the buyer e.g transfer risk, expropriation, war risks, cancellation of an existing import and export license, and/or political violence.

Mandates of ECA’s

ECAs around the world share many features between themselves, including a common set of objectives. The main economic objectives of ECAs usually include:

  • Expand non-traditional exports of private sector goods and services;
  • Help to finance non-traditional exporters of all sizes, of all products, and of all regions of the country;
  • Provide assistance to indirect exporters to encourage development of linkage industries;
  • Supplement and complement, and not compete with, the commercial banks and other private institutions;
  • Seek to improve the country’s balance of payments and to increase domestic employment;
  • Help to diversify the products and foreign markets of non-traditional exporters;
  • Improve the financial skills of non-traditional exporters and reduce their risks in extending credit to foreign buyers;
  • Increase the knowledge and sophistication of the country’s banks in the area of export credit;
  • Encourage the national insurance industry to participate in coverage of the risks of non-payment of export credits;
  • Provide assistance for exports that are deemed to be in the national interest and those that provide “substantial benefit” to their economy;
  • Help national firms to make investments abroad in order to increase the nation’s foreign exchange earnings;
  • Seek to match officially supported foreign financial competition.


Most importantly, it should be noted that ECAs are not profit seeking enterprises, but rather specialised government agencies seeking a broader mandate of export boosting and trade credit facilitation. It is therefore by design that across the world, rarely do ECAs achieve financial returns, but rather deliver significant socio-economic returns at national scale, and therefore their return on investment measured on their contribution to trade facilitation.