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EXPORT CREDIT GUARANTEE PROGRAMS
GSM 102 and 103
Established in 1980, these programs are designed to reduce the risk involved in exporting and to make both exporters and banks more willing to explore new foreign market opportunities. USDA, through the Commodity Credit Corporation, provides backup guarantees for U.S. banks in case of nonpayment by foreign bank. GSM 102 is a short-term program, 6 months to 3 years. GSM 103 is a long-term program, up to 5 years for Peru, to promote livestock exports.
Peru participates in the $350 million program for the Andean Region. These programs are well known and thoroughly used by 8 Peruvian banks. At this moment the CCC has over 105 million dollars outstanding in Peru, which have been quite useful in increasing U.S. trade.
Supplier Credit Guarantee Program
In 1998 USDA authorized $20 million in credit guarantees for sales of U.S. agricultural commodities to the Andean Region- Bolivia, Chile, Colombia, Ecuador and Peru-under the CCC's Supplier Credit Guarantee Program (SCGP). This is an adaptation of the GSM-102 program and is designed to assist exporters of the U.S. agricultural commodities who wish to provide relatively short-term credit to their importers. Coverage up to 50 percent of the principal is offered on credit terms of up to 180 days.
Facility Credit Guarantee Program
In 1997 USDA authorized $10 million in credit guarantees for export sales of U.S. manufactured goods and services to improve existing agriculture-related facilities in Peru under the CCC's Facility Credit Guarantee Program (FGP). CCC will provide coverage up to 95 percent of the principal (facility value)on credit terms up to 8 years.
Quality Samples Program
This program assists U.S. entities in providing commodity samples to potential foreign importers to promote a better understanding and appreciation for the high quality of U.S. agricultural commodities.
Note: These programs were suspended in 2001 due to defaults by Peruvian banks. Currently Peru is an eligible destination but through banks in other countries in the region.
Do you want to know more about these credit programs? Click here.
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