Ibank and Exim to support halal exports

| 27/05/2009 | Reply

Credit guarantees will ease settlement feuds

By: WICHIT CHANTANUSORNSIRI

A new export guarantee programme from the
Islamic Bank of Thailand (Ibank) is aimed at helping Thai halal food
manufacturers conquer Middle East markets.

Signing the exportcredit agreement, from left: Dheerasak Suwannayos,
president of the Islamic Bank of Thailand, Deputy Finance Minister
Pruektichai Damrongrut, and Dr Apichai Boontherawara, the Exim Thailand
president. PATTARACHAI PREECHAPANICH

Ibank president Dheerasak Suwannayos yesterday signed an agreement
with Apichai Boontherawara, the president of the Export-Import Bank of
Thailand (Exim Bank), to arrange export credit guarantee services for
halal exporters.

Thailand is the world’s seventh-largest halal exporter, with annual
revenue of more than 50 billion baht, said Mr Dheerasak. Exports are
also rising by double digits each year, with some manufacturers seeing
sales grow as much as 40%.

Global imports of halal food are estimated to be worth US$265 billion per year.

Export guarantees will reduce credit risks for Thai exporters,
particularly in markets such as Sudan and South Africa where Thai
companies have encountered settlement problems.

”We hope that this service will help reassure exporters when entering new markets,” said Mr Dheerasak.

Seafood such as canned fish makes up much of Thailand’s halal
exports. Processed chicken, another major Thai export, has yet to grow
significantly in the halal segment as some countries have raised doubts
over whether local slaughtering methods comply with the regulations of
Islamic law.

Export credit guarantees, which protect exporters in cases of
non-payment, are likely to be popular among Ibank clients, said Mr
Dheerasak.

The guarantee service is expected to constitute 4 billion baht of
the 6 billion baht in trade financing arranged for halal producers each
year.

Pruektichai Damrongrut, a deputy finance minister, said the
government had set aside 14.9 billion baht to raise capital for state
banks such as Exim Bank to support their lending activities.

Authorities are considering allocating between 3 and 5 billion baht
of the funds for Exim Bank alone to ease exporters’ access to credit.

Dr Apichai said 5 billion baht more capital for Exim Bank would
raise its capacity to offer credit guarantees to 100-150 billion baht.

Category: Asia

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