Durrant Pate/Contributor

Trinidad and Tobago’s EXIMBank has stepped up its foreign exchange provisions to local manufacturers, as a means of boosting the industry in the twin-island republic.

The bank has sold some US$296 million to 123 manufacturing companies from 2018 to May 9 under its Foreign Exchange Facility, designed specifically for manufacturers.

EXIMBank CEO, Navin Dookeran, who made the disclosure, pointed out that in 2020 and 2021 the bank sold US$75 million and US$147 million to manufacturers, respectively.

This he explained contributed to US$190 million in exports in 2020 and US$245 in 2021. To access the foreign exchange manufacturers must apply online and upload their company’s financial statements.

Availability of foreign exchange has been a problem plaguing the country for at least eight years, which was, in turn, hindering manufacturers from exporting. In 2018, the Ministry of Finance launched the EXIMBank’s Forex Facility to ease the burden by funding critical imports needed by manufacturers to export.

FX facility achieved its objective

According to Dookeran, “the forex facility for manufacturers achieved its intended objective, having acted as a catalyst for economic growth and facilitated the acquisition of much needed raw-material inputs to ensure the sustainability of the manufacturing sector. He notes that the bank’s forex absorption capacity remained high within key segments, notably, food and beverage, building and construction, plastics and packaging as well as furniture and appliances.

The T&T EximBank explains that, “the foreign exchange facility started off with zero clients and at present we have 123 manufacturers and the aim is to get more manufacturers. So we are working with the TTMA to help boost the numbers.”

On the import side, assistance was also extended, whereby in response to the COVID-19 pandemic, over US$335 million was disbursed to 69 companies importing essential items such as pharmaceuticals, personal protective equipment (PPE), food and beverages, cleaning supplies and non-food items like batteries and light bulbs.

In March, Finance Minister Colm Imbert announced that his ministry was seeking to increase the allocation of foreign exchange to the EXIMBank so that it can up the allocations to importers of essential items and to expand the foreign exchange availability to MSMEs.

“We are going to put considerably more money into those special windows at the Eximbank to allow many more of our local businesses to access foreign exchange for productive purposes,” Minister Imbert declared, as he acknowledged the rising cost of goods and shipping caused by the COVID-19 pandemic and the Russia-Ukraine war.

EXIMBank financials

Dookeran reports that the bank generated after-tax profit of TT$49.5 million in its financial year ended December 31 2021, an increase of 342 per cent over the 2020 achievement of TT$11.2 million.

This robust growth is due to the increased income from foreign exchange operations to TT$47.2 million, as the bank ramped up forex delivery to manufacturers and importers of essential items to execute the Government policy of providing financial support to the sectors.

Despite relatively flat interest income year over year, net interest income still grew by 39 per cent to TT$11.3 million. This came about due to active treasury management, which resulted in the refinancing and pay-downs of higher cost liabilities, dropping interest expense by TT$3.7 million and capitalising on the global low-interest rate environment.

Impairment expense turnaround from a loss of TT$9.5 million to a positive write-back of TT$2.5 million in line with the experience across the banking sector year on year.

Dookeran attributes the performance and profitability to his hard working team of just over 40 employees.