Strengthening of guarantees for medium and long-term export transactions of exporters is the fifth and last part of the support package for companies developed in the Ministry of Economic Affairs and Communications in the amount of 6.1 billion kroons. With the State Export Guarantee Act the former principles and terms of issuing the state credit insurance shall be changed. Changes are necessary, as the existing system of export guarantees is working, but does not fulfil its purpose – the extent of transactions is too limited, realisation of single large risks may result in termination of offering guarantees. With the act, the currently valid State Export Guarantee Act shall be declared as void, and the provider of the state export guarantee shall be a credit insurance company AS KredEx Krediidikindlustus governed by private law, founded by the state and KredEx. Until the relevant activity license is obtained for the credit insurance company, KredEx shall issue guarantees; thereafter all export activity shall be directed to the credit insurance company.

 

Larger export guarantees shall increase trust in an entrepreneur in foreign markets. According to the act, in the event of a realisation of a business risk, the loss from an export transaction shall be compensated to the guarantee holder for up to 95%. The entry of the act into force and the creation of a new state credit insurer together with SA KredEx enable more efficient issuing of state export guarantees than before, especially regarding the medium and long-term export guarantees.

 

Export guarantees are aimed at increasing of export capability of Estonian exporting companies. In addition to financially measurable influence, export guarantees shall create several new long-term opportunities, thereby also increasing the export turnover. The most important one is that exporters shall have an opportunity to enter the markets still under development. The creation of a credit insurance provider makes it possible to offer other ordinary services according to the market need in addition to services guaranteed by the state. A sufficiently extensive activity shall create a basis for self-profitability, where also in the conditions of a limited market it is possible to operate with a profit.

 

Currently the volume of the SA KredEx Export Guarantee Target Fund is EEK 100 million, enabling to issue the guarantees for max EEK 800 million in total. In the Export Guarantee Act, the allowed maximum allowed amount of state export guarantees shall be increased from 1 billion kroons to 3 billion kroons, which is necessary to guarantee the extensive transactions taking place in foreign markets. A more extensive issuing of export guarantees than so far is possible due to an additional capitalisation of the system – 200 million kroons shall be allocated from the means of the European Union to provide a reinsurance to the credit insurance provider founded, in addition a budgetary investment into the share capital of the company also in the amount of 200 million kroons.