Overview

China Eximbank provides $2 million loan to FSM Development Bank for on-lending purposes

Commitments (Constant USD, 2023)$3,323,129

Commitment Year•2007Country of Activity•MicronesiaDirect Recipient Country of Incorporation•MicronesiaSector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Sep 29, 2007

Start (actual): Sep 29, 2007

End (actual): Jul 21, 2013

First repayment (originally scheduled): Apr 26, 2008

Last repayment (originally scheduled): Jul 1, 2011

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

Export-Import Bank of China (China Eximbank)

Receiving agencies

State-owned Banks

Federated States of Micronesia Development Bank (FSMDB)

Loan description

China Eximbank provides $2 million loan to FSM Development Bank for on-lending purposes

Grace period•1.32 yearsGrant element•5.8166%Interest rate (t₀)•7.38%Interest type•Fixed Interest RateMaturity•4.5 years

Narrative

Full Description

Project narrative

In April 2006, during FSM President Joseph J. Urusemal's visit to Beijing, the FSM Secretary of Foreign Affairs signed a memorandum of understanding (MoU) with Mr. Zhao Wenzhang, Vice President of China Eximbank regarding a $2 million credit line that would allow the Federated States of Micronesia Development Bank (FSMDB) to on-lend to local SMEs and Chinese firms. According to a Chinese embassy press release, as of August 2007, China Eximbank and FSMDB were set to officially sign the inter-bank lending agreement 'in the near future.' A 2013 FSMDB report (p. 20) says the unsecured (i.e. uncollateralized) loan was ‘activated’ on September 29, 2007 with a 7.38% annual fixed interest rate. Repayment of principal and interest began on January 21, 2009 in semi-annual principal installments of $200,000. As of December 31, 2012, the amount outstanding and payable was $400,000. FSMDB met the full repayment deadline on July 21, 2013.

Staff comments

1. This China Eximbank loan is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.