Finnvera sees increase in export credit demand
Finland’s export credit agency, Finnvera, says it has received significantly more applications for export credit than last year, despite a slight slowdown in the amount covered in H1 2012.
Export credit guarantees and special guarantees granted amounted to €2.03bn in the first half of this year, down from €2.33bn in H1 2011. However, outstanding commitments for export financing total €11.04bn, up almost €1bn from last year’s figure (€10.26bn).
Finnvera CEO Pauli Heikkilä says these results are just a consequence of a long application process, and expects demand to keep growing.
“Because international banks’ lending capacity is limited and they seek to share risk more often than before, even if Finnish exports themselves are not up, our demand is up.
“It seems to us that because of the uncertainties in the market, especially the euro crisis, and because of upcoming bank regulations, the international banks are requesting export credit more than they did before, not only guarantees but also financing, which we didn’t use to do but have now started doing,” he tells GTR.
However, Heikkilä explains that the percentage of Finnish content in Finnvera’s export transactions has gone down showing a tendency for Finnish companies to use subcontractors. “All ECAs need to calculate where the parts come from and where the research and development was performed to create the product. Finnish content is a percentage of the value of the product that was created, and there is a minimum limit we need to check in order to be able to finance the transaction.
“We follow that very carefully, and the Finnish content has become lower than before, which means that Finnish companies have used more subcontracting or parts from other countries,” he says.