Private Sector Asked to Join Network Supporting Small Businesses

LANSING – In a recent SBAM Barometer survey, 56 percent of Michigan small business owners said that increased financing opportunities would be very important in helping them increase their level of participation in the world economy. In a related development, a U.S. government agency is launching a new project to improve availability of financing for small business export opportunities.

The Overseas Private Investment Corporation (OPIC) invited the U.S. private sector to join the agency in a new alliance to administer $100 million in OPIC financing to U.S. small and medium-sized enterprises (SMEs), giving them better access to a kind of credit for overseas projects that is often difficult for SMEs to obtain.

OPIC has issued calls for proposals to financial institutions, business associations, educators and other interested parties to serve as lenders, loan originators and trainers in its new Enterprise Development Network (EDN), which is intended to facilitate efficient delivery of OPIC financing to SME projects. The financing will be administered through OPIC?s Small and Medium Enterprise Finance (SMEF) Department.

An analysis commissioned by OPIC last year concluded that such a network would be the most cost-effective way for OPIC to meet growing demand by American SMEs for its support. During fiscal year 2004, more than 200 SMEs approached OPIC for financing of international operations, a 51 percent increase over FY 2003. In 2004, its first year of operation, the SMEF Department increased OPIC?s SME productivity by 61 percent, while reducing processing time by 42 percent.

OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

To read the calls for proposals, click on Virtual.OPIC.Gov