Trade Finance – More than leasing…

1. Trade Finance – More than leasing… G. Eric Raby

2. Finance Opportunity “Every machinery purchase requires a finance decision – how to pay?”

3. Finance Opportunity: Defining the Needs Different Needs Require Different Solutions • End-user customers needpoint of sale leasing. • Distribution channels needwholesale finance. • Large agribusiness needproject finance. • Lesser developed areas need grants and financing. • The need for political cover, risk share, co-financing and technical assistance is evident as well.

4. MDI Leasing AID STF Wholesale Finance Opportunity: Defining the Solution To create optimum solutions in markets one must adopt a holistic approach by utilising all of the identified elements both individually and jointly depending on the requirements of each specific market or even customer. Multilateral Development Institutions Regional & international institutions that support economic development. Broad-based finance for key account customer projects & leasing programs. (Example: European Bank for Reconstruction & Development for risk sharing) Leasing Point of sale asset finance. Expertly defined criteria used to select best leasing providers. (Example: UCL in Ukraine) StructuredTrade Finance Government-support guarantees & insurance for export credit. Experienced & knowledgeable management of multiple ECA relationships and procedures. (Example: US EXIM Bank insurance for KAM client Agro LV in CIS) • AID • Government grants to support developing and post-conflict countries. • Accessing technical assistance funds and risk guarantees for credit and leasing. • (Example: Millennium Challenge Corporation and USAID cooperation in Africa.) Wholesale Finance Dealer credit facilities forstocking product. Country-specific approach (credit, leasing and insurance) (Example: Atradius insurance for dealer credit facility in Russia)

5. Tier 2 Tier 3 Finance Opportunity: Defining the Customer • Tier 1 – Large Scale Agribusiness • Needs: • STF Project Business - Direct • MDI Co-Finance Support • Most Competitive Leasing Tier1 • Tier 2 – Mature markets, mid-size customers • Needs: • Point of Sale Leasing • STF Project Finance – Bank Guaranteed • MDI Risk-Sharing Enhanced Leasing • Tier 3 – Emerging & mature markets, smaller customers • Needs: • Leasing • MDI Risk Sharing Enhanced Leasing Tier 4 • Tier 4 – Inception markets; manual to mechanized • Needs: • AID, Grants and Financing • MDI Risk Sharing via Enhanced Leasing

6. Finance Opportunity: Defining the Focus Finance Needs –Russia Matching the customer need to the best solution • Leasing – flow financing, POS • Structured Trade Finance – projects, credit lines • Multilateral Development Institutions - Risk-sharing, political cover • Russian banks – Made-in-Russia initiative & ECA facilities • Wholesale Finance – providing resource for channels MDI AID Leasing Wholesale STF

7. Summary • Russia is a key market for agricultural equipment due to its size and potential • It is somewhat of a mixed bag from a finance perspective – old methods blended with new needs • Subsidies (goods or rates) are still part of the equation – Government-led • Foreign investment is a driver, but ebbs and flows • Liquidity in the market for 2012 is uncertain / WTO could be adverse to the margins of many Russian ag businesses • Overall and long-term prospects for Russia are still very strong and will likely mature at a rate faster than the United States did in the mid-20th century and as such, will provide an on-going need for finance solutions