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Finnvera’s export credit fills a gap in export financing improving particularly the opportunities of smaller export projects and SMEs

The aim is to improve the exports and growth of smaller export projects and SMEs.
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Finnvera Group will start granting export credits amounting less than EUR 20 million directly to foreign customers of Finnish export companies. The granting becomes possible as the Finnish Parliament approved an amendment to the Act regarding publicly supported export and ship credits as well as interest equalisation and as the President of the Republic of Finland confirmed the law. The aim is to improve the exports and growth of smaller export projects and SMEs, as enterprises have an improved access to financing for their export projects. The granting of these export credits will start as the law has come into force on February 10.

In the current situation, it has been difficult to arrange buyer financing for export transactions amounting to less than EUR 20 million, which has slowed down the development of the exports of Finnish SMEs in particular. Finnvera's new export credit to the buyer, aimed at smaller transactions, responds to the Finnish exporters’ need.

“This is a change that has been expected also by the business field. Export credits improve the competitiveness of Finnish export companies in export transactions. An export credit is granted to a foreign customer of a Finnish export company, so the aim is to make buying easier and help Finnish exporters get more export deals. Studies have shown that the foreign competitors of the Finnish exporters have had similar financial instruments at their disposal. In this respect, Finnish export companies have been in a less favourable position,” says Juuso Heinilä, Executive Vice President at Finnvera.

If the buyer needs a long payment period of more than 2 years, the export credit can be the incentive needed to make the transaction happen. The credit is granted by Finnvera's subsidiary Finnish Export Credit Ltd and the credit risks are guaranteed by Finnvera. The credit can amount to approximately EUR 1–20 million. The credits are subject to the international OECD terms and conditions.

A solution for exporting Finnish capital goods – Finnvera complements the financial market

Export credit is a credit to a foreign company buying Finnish capital goods, such as machinery, equipment and production facilities, typically acting also as the end user of the product. The Finnish exporter applies for the export credit on behalf of the buyer. Finnvera Group assesses the borrower's creditworthiness and the risks related to the target country when making a credit decision. Finnvera's risk-taking policy remains unchanged and the possible collateral and need for a guarantor are assessed on a case-by-case basis according to the risk.

“Launching direct lending fills a gap detected in bank financing for export. Banks will continue to be Finnvera's most important partner in solving the financing needs of export companies. We also work closely with all other export financiers and insurers. Our task is to complement the financial market and secure the competitiveness of Finnish exporters in terms of the supply of finance. The diversification of exports and the success of export companies are our common goals,” Heinilä says.

Exports of great importance to the Finnish economy

Background studies made in collaboration with the Ministry of Economic Affairs and Employment, business life, export companies, banks and entrepreneur organisations have identified gaps in access to export financing.

“Exports are of crucial importance to the Finnish economy. Expanding financing opportunities will improve the competitiveness of export companies and also open up opportunities for increasing the exports of SMEs. A more broad-based provision of export credit is beneficial for society as a whole”, says Minister of Economic Affairs Mika Lintilä.

Further information:

Timo-Jaakko Uotila, The Ministry of Economic Affairs and Employment, tel. +358 (0)29 5047128

Juuso Heinilä, Executive Vice President, Finnvera, tel. +358 (0)29 460 2576

Minna Lindqvist, Development Manager, Large Corporates, Finnvera, tel. +358 029 460 2678

Otto Lindstedt, Finance Director, Growth and internationalisation, Finnvera, tel. +358 29 460 2706

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