Latest news with #EXIMBank
Business Recorder
2 days ago
- Business
- Business Recorder
The great myth of ‘crowding out'
Each time the conversation turns to Pakistan's credit-to-GDP, a familiar chorus follows: the sovereign is crowding out the private sector. Government borrowing is now over 70 percent of the banking sector liquidity, and is said to be absorbing all available capital, leaving none for entrepreneurs or exporters. Like 'value addition' or 'fiscal space,' crowding out has become an overused and underexamined refrain - repeated so often it now functions as a placeholder for serious thinking. The problem is not that the theory is always wrong. The problem is that it has flattened the debate into a single, self-reinforcing belief: that if the state would simply borrow less, banks would resume lending to the private sector. That assumption has been tested. And it failed. Over the past two decades, the state has repeatedly tried 'setting liquidity aside' for the private sector. The instrument of choice was the refinance scheme: liquidity created by the central bank and supplied to banks at zero or heavily concessional rates. These schemes were ostensibly meant to channel credit to sectors that markets overlooked: SMEs, exporters, housing, renewables. It worked, at least on the surface. Liquidity flowed, spreads narrowed, and targets were met. But none of it changed the basic credit calculus. Because banks still bore hundred percent of the credit risk,they predictably lent to the same credit profiles they always had: large corporates, familiar clients, and borrowers with collateral. Refinance simply made already-bankable clients cheaper to finance. It did not expand access. It did not alter risk appetite. Is it possible that bank's aversion to widening the credit net had little to do with access to liquidity, and more to do with their risk assessment? What refinance did achieve, quietly was monetary expansion. SBP injections inflated the money supply, bypassed budget scrutiny, and masked the true fiscal cost of subsidized lending. These schemes functioned as off-book quasi-fiscal operations, sold as developmental finance. The result: cheap credit for a few, inflation for the rest. Under the conditions of the ongoing IMF program, the façadeis being dismantled. Refinance is being pushed out of SBP and into the finance ministry. Subsidies will now be explicitly budgetedfor, and likely routed through developmental finance institutions such as the EXIM Bank. On paper, this improves transparency. The fiscal cost is now visible and subject to budgetary discipline. The inflationary impulse, while still present, is at least attached to real expenditure trade-offs. But cleaner optics do not guarantee better outcomes. Nothing about the shift from SBP to MoF alters banks' core behavior. Whether liquidity is created at the central bank or subsidized through the budget, the lending decision still rests with the bank, as does the credit risk. And most Pakistani firms still fail that test—not because they lack viability, but because they lack collateral, audited accounts, or institutional familiarity. That is the real constraint. Not liquidity. Not crowding out. Risk. And the data reflects it. Pakistan's private sector credit-to-GDP ratio has remained stuck under 15 percent for more than a decade, even during years such as 2022 when share of refinance climbed up to 20 percent of total private sector lending. In contrast, peer economies in South Asia and the broader middle-income cohort have steadily expanded credit penetration, without relying on artificial liquidity windows. The difference is not funding availability. It is system design. So no, crowding out is not the one-size-fit-all explanation for Pakistan's credit stagnation. The real story is institutional: a refusal to underwrite unfamiliar risk, a regulatory framework that punishes diversification, and a policy discourse that keeps prescribing liquidity for a problem rooted in risk. Until that changes, liquidity will continue to rotate around the same borrowers, even as the rest of the economy remains locked out.
New Straits Times
26-05-2025
- Business
- New Straits Times
BPMB, EXIM Bank seal first joint deal with Duta Marine for FSO project
KUALA LUMPUR: Malaysia Bhd (BPMB) and Export-Import Bank of Malaysia Bhd (EXIM Bank), both under the BPMB Group, have concluded their first joint financing transaction with Duta Marine Sdn Bhd for the FSO Permata Dulang project. This landmark deal reflects the unified strategic direction of the newly merged group and supports the conversion of an oil tanker into a floating storage and offloading (FSO) vessel. The new unit will replace the ageing FSO Puteri Dulang, ensuring continued operations at the Dulang Field—one of Malaysia's longest-running offshore production sites. The financing includes RM555 million from BPMB and US$37 million in Islamic facilities from EXIM Bank, covering the vessel's acquisition, conversion, and mobilisation. The project is set to enhance energy security and infrastructure resilience while supporting long-term offshore operations. EXIM Bank also served as the exclusive arranger for Duta Marine's charter agreement with Petronas Carigali Sdn Bhd, reflecting its role in structuring strategic financing solutions. "This project represents the very essence of our purpose, to deliver impact capital for national development," said Datuk Muzaffar Hisham, Group Chief Executive Officer of BPMB. "It also demonstrates the power of synergy within the BPMB Group, where our combined expertise and focus allow us to support high-impact, high-value national priorities while empowering capable Bumiputera players," he said. EXIM Bank president and CEO Nurbayu Kassim Chang added, "We are honoured to support Duta Marine in a project of national significance. This effort showcases the strength of BPMB Group's integrated approach, bringing together complementary capabilities to strengthen Malaysia's oil and gas sector, enhance local participation, and enable homegrown enterprises to thrive on a global stage." Aligned with BPMB's Transportation & Logistics Programme, the project also supports the United Nations Sustainable Development Goals, particularly SDG 9 (Industry, Innovation and Infrastructure) and SDG 8 (Decent Work and Economic Growth). Duta Marine, a veteran Bumiputera offshore marine firm, secured a 10+5-year charter with PETRONAS Carigali following the extension of the Dulang Production Sharing Contract (PSC) to 2045. "We are deeply honoured to receive this support from BPMB and EXIM Bank," said Mahyudden Abdul Wahab, director and shareholder of Duta Marine. "This is more than just financing; it's a vote of confidence in the capabilities of Bumiputera companies to lead complex, high-impact projects." The project is expected to create jobs during both the conversion and operational phases and deliver economic spillover benefits to key growth areas such as Terengganu, further strengthening Malaysia's global energy position.
Reuters
23-05-2025
- Business
- Reuters
Perpetua submits application for up to $2 billion loan to US EXIM for antimony project
May 23 (Reuters) - Perpetua Resources (PPTA.O), opens new tab said on Friday it had submitted a formal application to the U.S. Export-Import Bank for potential debt financing of up to $2 billion to construct its Idaho antimony and gold Stibnite project. The company had received a letter of interest from the EXIM Bank in 2024 for an up to $1.8 billion loan for the project. Perpetua said the increase in the application amount reflects a rise in the estimated number of job-years indicated by the financial update and basic engineering work completed in the first quarter. The company's shares were up nearly 4% in afternoon trading. The Pentagon-backed mine, which would be the country's first antimony project, has an estimated reserve of 148 million pounds of the metal used in bullets and tanks, as well as in alloys for electric-vehicle batteries. President Donald Trump's administration has stepped up efforts to boost domestic production of critical minerals and raise government financing as part of a broad effort to offset China's near-total control of the sector. Earlier this week, Perpetua received the final federal permit, the Clean Water Act Section 404, from the U.S. Army Corps of Engineers for the project.
Daily Express
23-05-2025
- Business
- Daily Express
EXIM Bank backs Mac World's gulf expansion
Published on: Friday, May 23, 2025 Published on: Fri, May 23, 2025 By: Bernama Text Size: Kuala Lumpur: The Export-Import Bank of Malaysia Bhd (EXIM Bank) has inked a financing agreement with Mac World Food Industries LLC, a subsidiary of Mac World Group, to support its expansion into the Gulf Cooperation Council (GCC) market. The deal was signed during the Islamic Development Bank (IsDB) Annual Meeting in Algiers, Algeria, on May 21, 2025, and witnessed by the Malaysian Ambassador to Algeria, Rizany Irwan Muhamad Mazlan. Under the deal, EXIM Bank will provide shariah-compliant financing to support the construction and operation of Mac World's state-of-the-art packaging facility in Dubai Industrial City. The 9,287-square-metre site will strengthen Mac World's capabilities as a regional leader in edible cooking oils, driving growth across the United Arab Emirates and GCC markets. 'Building on its impressive RM1.7 billion sales in 2024, this strategic investment positions Mac World for sustained growth and market leadership. 'By sourcing raw materials from Malaysia, Mac World strengthens Malaysian upstream supply chains while scaling its downstream processing capabilities in the Middle East, strengthening Malaysia's footprint in the global halal economy,' the bank said in a statement on Thursday. Advertisement In 2024, EXIM Bank has a market exposure of RM248.5 million in the Middle East, and this agreement further strengthens its foothold in the region, reinforcing Malaysia's global influence in the thriving halal industry. EXIM Bank president and chief executive officer Nurbayu Kasim Chang said the bank is ready to fuel the momentum in strengthening Malaysia's presence in high-growth markets like the Gulf region. 'Our tailored, shariah-compliant solution propels their regional expansion while reinforcing Malaysia's leadership in Islamic finance and the halal economy,' she said. Mac World Group chairman and managing director Abraham Thomas said the company's mission to bring premium Malaysian halal food products to the world is now active in over 80 countries through their trusted brands. 'This new facility in the UAE will play a pivotal role in serving the growing demand in the GCC region and is projected to contribute over US$100 million in annual revenue,' he said. In 2024, Malaysia's halal industry generated RM62 billion, projected to grow to RM500 billion by 2030, contributing 11 per cent to gross domestic product and creating 700,000 job opportunities, reinforcing Malaysia's role as a powerhouse in the global halal economy. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Barnama
22-05-2025
- Business
- Barnama
EXIM Bank Malaysia Supports Mac World Industries' Expansion Into The Gulf Region With Strategic Financing
ALGERIA, May 22 (Bernama) -- The Export-Import Bank of Malaysia Berhad (EXIM Bank) today formalised a financing deal with Mac World Food Industries L.L.C (Mac World), a subsidiary of Mac World Group, to fuel its expansion into the Gulf Cooperation Council (GCC) market. Signed at the Islamic Development Bank (IsDB) Annual Meeting in Algiers and witnessed by Malaysian Ambassador HE Rizany Irwan, the agreement highlights Malaysia's drive to propel its halal industry globally. This is a part of Halal Development Corporation (HDC) and EXIM Bank's initiative to link Malaysian businesses with international halal market opportunities. EXIM Bank is supporting Mac World's ambitious expansion with Shariah-compliant financing, to support the construction and operational needs of its cutting-edge packaging facility in Dubai Industrial City. The 9,287-square-metre site will strengthen Mac World's capabilities as a regional leader in edible cooking oils, driving growth across the UAE and GCC markets. Building on its impressive RM1.7 billion sales in 2024, this strategic investment positions Mac World for sustained growth and market leadership.
