Agency lenders – both sides now

Side 1 – Why agencies are often the best lenders

This two-part series examines the positive and negative aspects of working with agency lenders or agencies. ‘Agency lender’ is a name given to a group of publicly-controlled or officially-affiliated lenders. They have either multilateral relationships – support from, and for, a large number of countries – or bilateral relationships – which historically entailed affiliation with one sovereign lender, which had a singular relationship with a sovereign borrower.

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Comments (2)

  • Quingyuan Zhang
    Quingyuan Zhang, John Deere Financial Services 12 February 2016

    Good article. The turnaround time and the risk-sharing requirement can be roadblocks sometimes

  • William Laraque
    William Laraque, US-International Trade Services 11 February 2016

    I have to substantially agree with this to-be-continued treatise. Several comments. It is in my opinion dangerous to indicate that agency lending takes place separate from commercial bank loans. While it is true that direct loans involve making loans from a sovereign treasury to a borrowing foreign entity, the role of agencies is to complement commercial bank lending especially when we are dealing with the fast growing SME sector of global economies. Secondly, to indicate that agency lenders do not syndicate loans may be factual but it may not be a trend we want to encourage. Taking a multilateral approach so that US-Exim piggybacks with EBRD in financing an export project, for example, would benefit all the countries involved. My final comment is in regard to "Uncle Sam drives a hard bargain." I respectfully disagree. If 1% of doctors account for 31% of Medicaid claims, how hard a bargain can Uncle Sam be driving? I agree that government has a valuable role to play, particularly when a long-term vision and long-term considerations are needed as contrasted with the short-termism of corporations which file quarterly financial statements for impatient shareholders.

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