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Overview

ICBC extends line of credit to Argentinian SMEs to pre-finance working capital for exports worth $500 million pesos (Linked to Record ID#97578)

Commitments (Constant USD, 2023)$4,849,293
Commitment Year•2021Country of Activity•ArgentinaDirect Recipient Country of Incorporation•ArgentinaSector•Trade Policies And RegulationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 12, 2021
Start (actual)
Mar 12, 2021
End (planned)
Jun 30, 2021

Geospatial footprint

Map overview

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ICBC extends line of credit to Argentinian SMEs to pre-finance working capital for exports. More detailed locational information can be found at:https://www.openstreetmap.org/relation/2337971

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 Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Receiving agencies

Government Agencies

  • Argentina Ministry of Productive Development

Loan description

ICBC extends line of credit to Argentinian SMEs to pre-finance working capital for exports worth $500 million pesos

Interest type•Unknown

Narrative

Full Description

Project narrative

On March 12, 2021, the Argentinian Minister of Productive Development, Matías Kulfas, led the launch of the Productive Cooperation Plan with China, a comprehensive bilateral cooperation agreement through which it is expected to double the exports of Argentine SMEs to the People's Republic of China. The plan includes specific credit lines with a rate subsidized by the National Fund for Productive Development (FONDEP) to finance exports to China. A line of credit is in force until June 30, 2021, or until the quota is exhausted, in conjunction with Banco ICBC to pre-finance working capital for exports to China, either in pesos or in dollars. The advance line in Argentine pesos has a total amount of $500 million and grants credits of up to $16,000,000 for first exporters and infrequent exporters, with a subsidized rate of 27% and 75% FOGAR guarantees; and credits of up to $24,000,000 for frequent exporters, with a subsidized rate of 30%. Regarding the pre-financing line for exports in dollars, it has a total quota of $10 million for credits of up to $200,000 for first exporters and infrequent exporters, with a rate subsidized by FONDEP of 4% and a guarantee from FOGAR of 75% for first exporters and infrequent exporters; and credits of up to $300,000 for Frequent Exporters, with a rate subsidized by FONDEP of 4.5% (see Record ID#97578). As of November 11, 2021, more than one million loans had been granted, for a total amount of more than $216,000 million.

Staff comments

1. AidData codes all pre-export finance (PXF) facilities as collateralized since they are almost always secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited.