Opportunities & challenges faced by Asian Exim Banks in Financing SMEs

Organised by
Indonesia Eximbank
Jakarta, Indonesia
Brief Summary

Under the auspices of Asian Exim Banks Training Committee, BEI, Indonesia conducted the 1st Training Program on "Opportunities and Challenges faced by Asian Exim Banks in Financing SMEs in Jakarta, Indonesia between April 3-5 , 2006. Apart from classroom sessions, field visit to an SME supported by BEI was also planned.
Mr. Arifin Indra, President, BEI, Indonesia welcomed the participants and faculty members. The program was kept interactive for better understanding of SME initiatives and issues faced by Asian Exim Banks.


JBIC, Mr. Yuhei Ohmi, Senior Representative, Jakarta Office
EFIC, Australia, Mr. Sunil Aranha, Director SME
Korea Exim, Mr. Eung Ho Ahn, Director, Northeast Asia Team - Overseas Economic Research Institute
Exim Bank, India, Mr. K. Muthukumaran, General Manager
Exim Bank, Malaysia, Mr.Resham Singh, Head, Export Finance Department
Exim Bank, Thailand, Ms. Kasina Srisaan, First VP, Small Business Development
Exim Bank, Philippines, Ms. Eugenia Ong Sinnug, Executive Vice President, Small Business Development Group
BEI & Bank Rakyat, Indonesia, Mr. Denny S. Adji, Head, Credit Policy and Development Department,BRI and Ms. Tri Uttami, Vice President, Credit Group, BEI
Key Points

The definition of SME differs amongst AEBF member countries.
SMEs contribute quite significantly towards exports and generation of employment in most of AEBF countries, highest in Thailand and lowest in South Korea/Japan.
Institutional framework and policy specifications are significant factors in helping the evolution and success of SMEs across AEBF countries.
Problems faced by SMEs amongst AEBF countries are similar viz., limited managerial talent, low sustenance in terms of any crisis ( Operations of many of the SMEs were affected during the ASEAN Currency Crisis ), low technology base, limited product range, remains in the lower end of value/supply chain, operating at sub-optimal capacity with low profit margins.
Problems faced by banks and ECAs in financing SMEs are almost identical viz, Asymmetry of information (while the financials submitted by SMEs are suspect in some countries, especially in Philippines, SMEs are known to prepare two sets of financials one for the bank and another tax/regulatory authorities), lack of professionalism, no clear succession planning, insufficient capital, diversion of funds, poor financial planning etc.
AEBs offer advisory services to SMEs either in structured form or an adhoc service.
Thai Exim Bank has been operating an interesting program " SME Exporter Service Centre" which offers following services;
Sharpening the competitive edge of Thai SME exporters
Counseling SME exporters in managing their finance efficiently
Export and trade information and networking with export-related agencies
Muli-channel accesses (especially while participating in international trade fairs)
Advise on export procedures, incoterms, documentary credits, international payment systems
New Entrepreneurs Creation (NEC) to target for export markets.
Visit to SMEs Supported by BEI & BRI

Cottage industry manufacturing stuffed toys. The stuff toys produced by the unit were sold mainly to large departmental stores. The unit employs mainly women workforce with an average salary of USD 75 p.m. with limited automation.
Olympic Furniture (Presero), a leading knock down furniture manufacture-exporter in Indonesia, funded by BEI. Olympic turnover exceeds USD 100 mn for the FY 2005, with over 75% contributed by exports. Major markets are West Asia, EU and ASEAN countries. It was visible to note the company's strength in innovative development of new products, automation of key operations, high quality, low product rework/rejection, pro active services etc.
Training Date