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Overview

ICBC extends line of credit to Argentinian SMEs to pre-finance working capital for exports worth USD $10 million (Linked to Record ID#97577)

Commitments (Constant USD, 2023)$9,221,416
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
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 desecription

ICBC extends line of credit to Argentinian SMEs to pre-finance working capital for exports worth USD $10 million

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. It 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 pre-financing line for exports in dollars has a total quota of USD $10 million for credits of up to USD $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 USD $ 300,000 for Frequent Exporters, with a rate subsidized by FONDEP of 4.5%. Regarding the advance pre-financing line in Argentine pesos, it 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% (see Record ID#97577). 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.