ANNOUNCEMENT 19 Dec 2014In December 2014, the government of Japan announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation press release: Loan for Sales Financing Business of Motorcycles by Japanese Company in Indonesia and Guarantee for Loans by Cofinancing Financial Institutions. Available at: http://www.jbic.go.jp/en/information/press/press-2014/1219-33410
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
On 19 December 2014 the Japan Bank for International Cooperation (JBIC) signed a USD 25 million overseas investment loan agreement the with Indonesian firm Federal International Finance. A number of commercial banks are co-financing the loan totalling USD 225 million. Besides its own contribution, JBIC will also guarantee an unspecified part of the total loan volume. The purpose of the loan is to finance the sales of Japanese motorcycle brand Honda in Indonesia.
In this context the Bank stated: 'Thus, to promote sales and increase market share in this market, sales financing is an important tool of business strategy for every motorcycle manufacturers. This loan will therefore support the overseas business deployment of a Japanese motorcycle manufacturer, and thereby contribute to maintaining and strengthening the international competitiveness of the Japanese motorcycle industry through support for sales financing of motorcycles.'
Overseas investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank's website under overseas investment loans.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.