Demand Brisk for Domestic Financing, More Moderate for Export Credit Guarantees

Finnvera's Interim Report 1 January-30 June 2004

The risk financing granted by Finnvera plc for enterprise operations in Finland totalled EUR 525.8 million (EUR 447.3 million), or 18 per cent more than during the corresponding period the year before. Guarantees pertaining to foreign risk-taking totalled EUR 1,072.9 million, or about two-thirds of the sum for the first half of the previous year. At the end of the period under review, Finnvera had 26,000 clients. It is estimated that the domestic projects financed during the first half of the year will help create some 6,600 new jobs.

One reason for the rapid increase in domestic financing was the higher volume of investments among SMEs. In addition, company reorganisations form a central part of Finnvera¿s financing projects and demand for financing. Estimates indicate that the demand for Finnvera¿s domestic financing will remain high. It is likely that the company¿s current authorisation to grant financing for SMEs will not be sufficient to meet the demand during the rest of the year.

In domestic financing, the share of guarantees rose to 57 per cent of all financing granted. In entrepreneur loans ¿ used, for instance, for the financing of changes of ownership and generation ¿ the total sum increased by 22 per cent on the sum granted during the first six months of 2003. The financing granted promoted the implementation of projects totalling EUR 1.32 billion.

The company acquired 2,434 new clients, which is more than during the first six months the year before (2,161). Of the new clients, 66 per cent were enterprises at the start of their operations. In all, the number of Finnvera¿s clients rose during the first half of the year. On 30 June 2004, Finnvera had 26,000 clients (25,700).

Guarantees pertaining to foreign risk-taking totalled EUR 1,072.9 million, which is two-thirds of the sum for the corresponding period the year before (EUR 1,732.9 million). The development of Finnvera's export credit guarantee volumes depends on individual large export transactions and on how these are financed. Commercial financiers have taken a more active role in the provision of financing for exports. Finnvera's task is to offset deficiencies on the export financing market. When financiers operating on market terms assume a larger share of all financing, the demand for Finnvera's export credit guarantees falls.

On 30 June 2004, the outstanding commitments of Finnvera plc totalled EUR 6.0 billion, as against EUR 5.7 billion a year ago. Credits and domestic guarantees accounted for EUR 2.1 billion