Related News

Atradius names special products director as David steps down

Trafigura bags US$560mn ECA-backed deal to supply gas to Japan

Eksfin puts wind in sails of UK renewable energy deal

Turkmenistan power plant taps ECA-backed Commerzbank guarantee line

Olam brews up first ECA-backed transaction

EKF, Denmark’s export credit agency (ECA), has agreed to offer direct loans to the country’s exporters through two Danish crowdlending platforms, Flex Funding and Lendino.

As part of the agreements, Danish exporting firms seeking to raise capital from private investors via the platforms will have the option of obtaining up to half of their funding from the ECA.

EKF will offer financing on the same terms as other investors, investing up to a maximum of DKr5mn over five years.

Given EKF’s mandate for supporting exports, any businesses seeking to raise funds under these agreements will need to generate a minimum of 20% of their revenue from exports.

EKF’s CEO, Kirstine Damkjær, says that by helping the crowdlending market in Denmark develop, the ECA will bolster financing for small and medium-sized enterprises (SMEs) looking to grow and export.

Speaking about the new arrangement, Henrik Vad, CEO of Flex Funding, says: “The partnership means that with the security of government backing, we are in a position to double the loan amount, while also ensuring swift and efficient application processing.”

“We have been seeing that many SMEs are finding bank loans slow and hard to come by. This means they have a great need to find alternative financing for their growth and exports,” he adds.

Businesses in Denmark have fared relatively well during the Covid-19 pandemic when compared with their counterparts in Western Europe, a survey of over 2,600 businesses throughout the region by trade credit insurer Atradius shows.

Released in November, the Payments Practice Barometer – an annual survey of corporates of all sizes on their payment behaviour – notes that fewer businesses in Denmark reported difficulties with profitability, cash flow, revenue and sales than the average for Western Europe.

Erik Skovgaard Nielsen, Atradius country manager for Denmark, says it has helped that the country’s food and pharmaceutical export products have continued to be in “high demand”.

Meanwhile, another factor propping up confidence among Danish firms has been a “strong tradition” of credit insurance in the country.

“After the onset of the pandemic, take up of credit insurance increased even further among businesses in every sector, including a high proportion who used it for the first time [49%]. This has enabled trade to keep flowing and provided a strong framework of business confidence,” Nielsen adds.

But there is still cause for concern over what the effect will be on Danish businesses when government Covid-19 support measures expire, which could have an impact on payments and business insolvencies.

“Adding to the uncertainty is the overall high dependency on export and international trade as more than half of the Danish GDP is export driven,” Nielsen notes.

With supply chains disrupted and global demand hampered by Covid-19 restriction measures, ECAs around the world have rolled out a wide-range of emergency support packages for exporters this year.

Responses have varied from country to country, with several ECAs telling GTR earlier in the year that they’ve put in place a variety of new or temporary measures, such as working capital guarantees, or debt holiday agreements for operators in stricken sectors, such as aviation and shipping.