President of the British Exporters Association (Bexa), Richard Needham, has strongly criticised the way the UK’s export credit agency ECGD conducts its business.
Speaking at the annual Bexa luncheon on October 1, Needham accused the agency of not doing enough to support UK exporters and failing to help reduce the UK’s trade deficit.
He also criticised UK ambassadors for not having properly prepared business plans to support UK business abroad. He argues that the UK government should do more to encourage more trade, rather than merely concentrate on aid. “Aid and trade should talk to each other,” he stated.
He was particularly critical about suggestions that the agency might add surcharges to its export finance interest rates.
ECGD is presently going through a consultation period regarding the way it will support exporters in the future. Earlier this year, it conducted a public consultation on its fixed rate export financing (FREF) scheme, as the current scheme was due to expire at the end of March this year.
Bexa argues that the FREF scheme should be maintained, and that it can be crucial in winning export contracts and that failure to offer FREF at bidding stage could count against the UK exporter in securing the tender.
In response to this, ECGD issued the following statement to GTR: “ECGD had a public consultation on the future of its FREF scheme earlier this year. We took the views of exporters into account, and extended the scheme until the end of this year in order to discuss with exporters and banks how any future scheme would operate. No decision has yet been made; we will be making recommendations to ministers shortly, and the views of exporters will be fully reflected in that submission.”
Bexa’s annual review also included the results of its questionnaire on ECGD, with the aim of finding out why many companies do not use the agency. A total of 43 companies responded to the questionnaire and although several reported that ECGD had been supportive to its business endeavours, others pointed out some of its key faults. Reasons given for not working with ECGD included: a complicated process, costs compared to commercial credit, its unwillingness to collaborate with private insurers, and its lack of support for short-term business. The agency’s lack of provision for smaller exporters was of particular importance among those questioned.
When asked how ECGD could improve its service, suggestions included: bonding support for small companies; charge less for cover, develop better relationships with UK exporters’ customers and start joint marketing with banks to counter the perception of the agency being slow and uncompetitive.
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