State to Offer Loans to Foreign Trade Partners
In an attempt to boost ailing exports, the state credit agency KredEx has begun offering loans to foreign partners who are purchasing Estonian goods.
The project is aimed at larger deals that Estonian banks are reluctant to finance because of the foreign partner's home country, mostly Russia, Belarus and other non-EU countries, ETV reported on Wednesday.
The head of KredEx, Andrus Treier, said that until now Estonian companies were at a disadvantage when competing for foreign procurement, as the transactions often involve drawn-out payment schedules - usually two to five years - that the Estonian companies cannot cope with.
Now, for example, if an exported product costs one million euros, the Estonian seller will receive the whole sum in advance. The foreign partner would pay 300,000 in advance and another 300,000 euros after delivery, with KredEx lending the buyer the 400,000 euro difference at around 5 percent annual interest.
Treier said that KredEx has 10 to 20 million euros annually at its disposal for such export projects.
Recently released statistics show that Estonia's exports fell to a 1.5-year low in July and were down 10 percent compared with the same period last year.
KredEx also launched a venture capital fund exactly three months ago, with a budget of 55 million euros.