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Export Credit Guarantee

DFI guarantees export receivables, enabling banks to finance with reduced risk. Promotes trade.

Trade Finance
Complexity
Basic
Deal Size
$10M - $500M
Typical Tenor
2-5 years
Scalability
High
#trade-finance#export#guarantee#dfi#country-risk
Mini Map

Flow Types

Cash
Guarantee
Fee
Receivables

Transaction Timeline

Phase 1: Guarantee Issuance(1-4 weeks)

DFI issues guarantee, bank pays premium.

Use Cases

  • •Enable bank lending to exporters
  • •Reduce country/political risk exposure
  • •Support national export strategy
  • •Crowd in private sector financing

Problem Solved

Banks can finance exports they would otherwise decline due to buyer/country risk.

Revenue Calculator

Model deal economics

$50M
$10M$500M
100 bps
5 bps200 bps
10 bps
30 bps

Projected Revenue

Gross Carry Income$250,000
Funding Cost($25,000)
Net Carry$225,000
Upfront Fees$150,000
Total Revenue$375,000
Annualized Return
150.0 bps
If Repeated Annually
$750,000

Revenue Sources

Carry Income

Guarantee Premium50-150 bps

Fee charged for providing credit guarantee

Upfront

Fee Income

Application FeeOne-time
20-40 bps

Fee for processing guarantee application

Regulatory Checkpoints

Risk Flags

Country Risk ConcentrationHigh

Portfolio concentrated in few high-risk countries.

Mitigation:Country limits, reinsurance, portfolio diversification.
Moral HazardMedium

Banks may weaken underwriting with guarantee protection.

Mitigation:Retention requirements, loss sharing, due diligence standards.