The amendments are scheduled to enter into force at the start of 2012.
According to the new permanent export financing system of the credit type, Finnvera’s subsidiary, Finnish Export Credit Ltd, will grant credits. Finnvera will be responsible for the necessary acquisition of funds and liquidity management. The acquisition of funds is guaranteed by the State.
The objective is to ensure the competitiveness of Finnish export companies by improving arrangements for financing. Banks will still play a pivotal role in the new model. In the model, the credits granted by Finnish Export Credit are used for financing long-term export credits (a minimum of two years) arranged by a Finnish or foreign bank on the OECD terms. The arrangement always includes an export credit guarantee granted by Finnvera.
The total outstanding credits granted for export financing may not exceed EUR 3 billion.
The current Finnish model for export financing is not competitive when compared to Finland's main competitor countries. The financing system based on export credit guarantees and interest equalisation involves problems stemming from the fact that commercial banks have fewer opportunities to provide long-term export financing, for instance, because of the new Basel III regulatory framework that will enter into force within a few years, Finnvera says on their webiste.
“A lack of trust between banks has diminished their possibilities to grant long-term export financing. For this reason, the financing model now planned will be put into use at the right time,” says Executive Vice President Topi Vesteri, responsible for export financing at Finnvera.
