Last year the volume of loan guarantees issued by KredEx was 805 million kroons, enabling 369 companies to include the financing from the banks in the sum of 1.5 billion kroons. In comparison with the year 2008 the sum of issued guarantees increased by 125%. In comparison with the previous years, the share of both, the turnover capital loans, but also the bank guarantees, has increased significantly, while the share of investment loans has decreased.
According to the head of the KredEx enterprise and export division Mr. Lehar Kütt such trends depend on the economic cycle.
”During the times of economic recession, entrepreneurs need mainly circulating capital and investment plans are put on hold. More investments are being made, when economic growth is expected. Today we can say that the investments are slowly coming back,” said Lehar Kütt.
The sum of KredEx’s valid guarantee commitments for business loans exceeded for the first time the limit of 1 billion kroons. As of the end of 2009 the portfolio volume was 1,062 million kroons. During the year the portfolio grew 65% or by 415 million kroons. The largest part of KredEx portfolio by areas of activity is timber industry (17%), followed by retail and wholesale business (11%) and metal and metal products industry (10%). KredEx business loans guarantees are co-financed from the European Regional Development Fund.
”Between the years 2000 and 2008 the loan market of Estonia functioned well and as a rule companies with good economic results had no problems with obtaining the necessary financing. Due to that only a limited number of companies needed KredEx loan guarantees and during the years the volumes increased at a relatively modest pace. 2008. In the second half of 2008 the financing opportunities of the Estonian companies deteriorated significantly. Banks made credit conditions stricter, suppliers demanded advance payments and customers shortened the delivery dates. All this intensified the financial difficulties of the companies, which became evident after the volume of sales was reduced. After the financing conditions became rougher, the real estate prices dropped and the liquidity of real estate assets decreased, bringing along the worsening of the security position for the companies. So, as a result the role of KredEx in Estonian economy has increased significantly during the past 1.5 years, and the guarantee volumes have considerably grown,” added Mr. Lehar Kütt.
Within the framework of support package, financed by European Regional Development Fund, KredEx offers companies also subordinated loans with result-based interest since the beginning of April. During the last year the loan was issued to 15 companies in the total amount of 126 million kroons. KredEx offers since the year 2006 in addition to the subordinated loans with result-based interest also the fixed rate subordinated loans (capital loans), that were issued to 12 companies in the total amount of 85 million kroons.
From May KredEx offers within the framework of support package and in co-operation with banks credit resource that is directed to exporting companies, the goal of which is to allow long-term financing with favorable interest to companies with essential influence to Estonian economy. Until the end of 2009 the so-called project-based resource was offered, and so far 14 companies in the total amount of 266 million kroons have used it. Starting with January 2010 a credit resource is provided for the same purpose through banks as a single limit in the total sum of 1.2 billion kroons. Based on the results of the procurement, KredEx is working in co-operation with UniCredit Bank, Estonian Branch.and Swedbank, while issuing the credit resource. To obtain the loan, one must have recourse to the above-mentioned bank where the enterprise will pass an ordinary credit eligibility test.
