UK EXPORT FINANCE | BUSINESS PROFILE
In response, and to encourage the take-up
MAKING EXPORTS HAPPEN
UK EXPORT FINANCE
www.gov.uk/uk-export-finance
of its services, UKEF is running awareness-raising campaigns. It has also enhanced its skill sets and established a network of regional export finance advisers, to guide exporters through the process of gaining access to export finance, whether from private sector banks and insurance providers, or through UKEF.
EXTENDED REACH UKEF has also greatly extended the reach of its medium to long-term finance (MLT) products for overseas buyers of UK goods and services. “Many banks are still reluctant to engage in MLT lending,” says Godfrey. “This is often due to stringent regulatory oversight and constraints on liquidity – but UKEF has stepped in to fill that void.” In October 2014, Chancellor George Osborne
When the global financial crisis unfolded, it hit the UK’s exporting community hard. In particular, this resulted in major constraints on private sector lending and insurance. Today, in the context of a recovering economy, UK Export Finance (UKEF) – the UK’s export credit agency and a government department – is performing an important role in supporting the country’s exports at each stage of the economic cycle. Formally known as the Export Credits Guarantee Department, it supports UK exports by providing guarantees and loans to enable overseas buyers to purchase UK goods and services. It also provides insurance policies to UK exporters, protecting them against the risk of non- payment. It now offers the widest product range it has had in more than 20 years, to a growing and broader range of customers. “UKEF is becoming more flexible in its support and has become a significant asset in the government’s export drive,” says Chief Executive David Godfrey. “However, there is a lot more we would like to do.”
BRIDGING THE GAP UKEF has worked to bridge the gap created by major withdrawals of bank and private insurance
capacity. To do so, it needed to reintroduce products and re-engage with segments of the market it hadn’t supported for many years. “Having come from a position of mainly supporting aerospace and capital goods exports, and a 50 per cent reduction in staff between 2004 and 2010, we were viewed as bureaucratic and slow, “ says Godfrey. “But we are surprising people with how quickly we have moved ourselves back among the leading export credit agencies.” In 2011, the government expanded UKEF’s
remit so that it could support the export of all types of goods and services. In addition, UKEF introduced a range of new products to address gaps in the short-term trade finance and insurance market, particularly aimed at supporting smaller businesses. “We recognise that export finance is a
complex topic for many companies, including SME and mid-sized companies, and believe there are still many companies out there who are not aware of UK Export Finance and the support we can offer,” says Godfrey. “Our challenge going forward is to ensure we reach as many of these companies as possible.”
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announced the first contract to be supported by the UKEF’s enhanced Direct Lending Facility. Under the facility, loans are provided by UKEF directly to overseas buyers for the purchase of goods and services from UK exporters; the first time in UKEF’s history it has been able to lend directly. “As a sign of our ambition, we invited
20 financial institutions to sign up to become partners in helping UKEF to deliver more of the loans,” says Godfrey. “As the types of exports being discussed involve high-value goods and services for major projects, Direct Lending will tangibly help to strengthen supply »
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