The system for financing international trade in the United States includes the traditional methods of trade finance offered by the banking system and means of guaranteeing or insuring export finance credits by the U.S. Export-Import Bank (Ex-Im) and the Foreign Credit Insurance Association (FCIA). One other organization supplements the U.S. system and its methods are entirely different from any of the other institutional methods previously discussed. This is the Private Export Funding Corporation (PEFCO), whose history and operations are the topics of this chapter.
PEFCO was incorporated in 1970. It is a private sector corporation that has issued its own stock. Its principal business is to make loans to foreign importers to finance purchases of goods and services which are manufactured in or originate in the United States. Thus, PEFCO works on the other side of the table, financing the importer of U.S. goods and services. Its principal mission is to facilitate U.S. exports through competitive financing in conjunction with Ex-Im, or, as stated in its 2001 Annual Report, “to assist in the financing of U.S. exports by mobilizing private capital as a supplement to the financing already available through Eximbank, commercial banks, and lending institutions.”
PEFCO is essentially a consortium or joint international business venture. Its shareholders include major commercial banks that finance U.S. exports as well as industrial companies that export U.S. goods and services along with other financial services firms. PEFCO currently has thirty-six shareholders, including banks, industrial companies, and