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News
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03.01.2007
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In 2006 KredEx paid to Estonian exporters 13 million kroons for indemnifications due to problems with foreign partners. During the period of its activity KredEx has paid 27 million kroons of export guarantee indemnifications to entrepreneurs.
According to Andrus Treier, the Head of KredEx, the indemnification is a natural part of guaranteeing activity and continues to prove the necessity of export guarantees to entrepreneurs. “One should surely be cautious with new enterprises with a short history of business activity, but at the same time the practice of KredEx displays that often problems may also emerge with long-term foreign partners. There have been cases where well functioning companies of long history have quickly become bankrupt due to the concurrence of negative factors. One should surely consider the guarantee in case the sums of transactions are big and the lack of payment of a purchaser can create serious problems to the company," remarked Treier.
In 2006 the export turnover guaranteed by KredEx amounted to 595 million kroons and 15 indemnifications were paid out, totalling 13 million kroons. The biggest disbursements were made at the German and Russian direction, totalling respectively 5.4 million and 3.7 million kroons. Additionally indemnifications were recompensed to companies who exported the products to UK, Finland, Denmark, Italy and Greece.
Also according to Külli Paap, the Head of Trade Financing Department of the Sampo Bank, the background of the purchaser is often examined at the beginning of cooperation and no later constant monitoring will be carried out. “We have noticed that major damage is caused namely by long term partners. They are trusted and the fiscal situation of the company is checked less, but also such long term partners tend to end up being bankrupt or develop payment difficulties. We had most problems last year namely with German and Lithuanian companies. I would advise the exporters to check the background of long term partners from time to time and surely also think how to manage the possible payment risk,” Paap said.
KredEx has been securing the export of Estonian companies already since 2001. The annual increase of indemnifications has been first of all caused by the increase of guaranteed export turnover. If in 2003 KredEx guaranteed 167 million kroons of business export transactions, in 2004 it amounted already to 684 million and in 2005 to 779 million kroons. During the period of its activity KredEx has guaranteed the export transactions of Estonian entrepreneurs approximately for 2.3 million kroons.
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