Improving the Role of Eximbanks/ECAs in the OIC Member States
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Although the New Zealand case recommends itself for adopting a go-slow and careful approach
and relying on outsourcing the technical management of the entity, an ECA under the direct
supervision of the Secretary of the Treasury may have certain limitations that make the model
unsuitable for emulation. Nevertheless, there are important features of the New Zealand model
from which important lessons can be drawn.
1. Start slow: before investing in the full set up costs of “bricks and mortar” to establish a
new entity, it might be worthwhile going in stages as business demand builds over time.
2. Listen to the exporters: they know better than anyone what challenges they face.
Regular consultations and formal feedback via surveys is critical to keep the institution
updated on what exporters need.
3. Outsource to the experts: when setting up a new program, facility or institution, it
often less expensive for an organization not to “reinvent the wheel” but rely on experts
who have done it before in other contexts.
4. Create synergies with other parts of government : ECAs are part of a government
policy infrastructure and while being experts in foreign risk assessment, they may find
that other government agencies are better suited to be on the front lines with exporters.
Relying on trade promotion and training arms of government to bring awareness of an
ECA’s product offering can be very effective.
5.3.2. Finland
A Key Player when the Market is Disrupted
Finnvera is Finland’s ECA. It also is the Finnish SME Development
Bank, serving domestic small business financing needs. As a state-owned specialized risk-
financing company Finnvera provides financial support for the start-up, growth and
internationalization of SMEs and, as well as, guarantees and financing against risks related to
exports. As a public limited company completely owned by the State of Finland, Finnvera is
administered and governed by the Ministry for Employment and the Economy (MEE).
Finnvera (or its predecessors) began its export credit functions in 1963. In 2005, Finnish Export
Credit Ltd (FEC) which was the export financing arm of government became a subsidiary of
Finnvera and since the beginning of 2012, the activities and staff of FEC have been absorbed into
Finnvera. FEC enjoys a special withholding tax exemption in the tax treaties the government has
signed with over 20 countries.
Finnvera offers the usual range of contingent liability products, including short-term export
credit insurance, Medium &Long-term Export Credit Guarantees, (specific transaction) Working
Capital Guarantees, Political Risk Insurance and a range of bonding facilities. For the export and
special guarantees business, Finnvera has access to the State Guarantee Fund to cover losses. The
State Guarantee Fund had cash reserves of €312 million. This means that, if Finnvera’s export
credit guarantee business makes a net loss exceeding the equity in Finnvera’s balance sheet
allocated to this business area, the Fund will cover the loss in excess of the equity. The Fund is
repaid by Finnvera from future profits. The profits from the domestic financing and export