Tools are needed to finance small export transactions - Finnvera begins preparations for granting Small Buyer Credits
Finnish exporters lack the tools for financing small export transactions that foreign competitors have at their disposal. At present, Finnish export companies are clearly in a weaker position than their foreign competitors, as the supply of banks to finance small export transactions is insufficient. This can be seen in a study commissioned by Finnvera, which interviewed, among others, 15 domestic and international banks and 40 export companies. On the basis of the study, Finnvera will prepare for the direct small buyer credits in order to accelerate small export transactions.
Nordic banks have either severely reduced their supply or completely withdrawn from buyer financing for small export transactions.
"SMEs are particularly affected, but the problem also affects larger companies, which need buyer financing for export transactions of less than EUR 20 million. The lack of supply has also led to a lack of knowledge about export financing instruments and financing options. Many SMEs have to finance buyers using their own balance sheets, which is expensive and limits or prevents companies from increasing their export volume", says Juuso Heinilä, Finnvera's Executive Vice President.
Enabling the grant requires an amendment to the law governing Finnvera's operations. Over the period required by law, direct lending to small export transactions is expected to be topical in the second half of 2021.
At the same time, we can already build our own processes to make our service available to export companies as soon as legally possible. Until then, companies can use, for example, credit insurance to mitigate export risks and secure export transactions. Diversifying exports safely for companies is now even more important, says Juuso Heinilä.
Juuso Heinilä, Executive Vice President, Finnvera, tel. +358 29 460 2576
Read more about the report conducted by independent advisors Nicholas Anderson and Pirjo Pakkanen: Report on Direct Cross-border Lending for Small-Size Export Contracts (PDF)