Milestone for NZ Export Credit Office

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As published in Trade News, Volume 2, Issue 2, June 2011.

The New Zealand Export Credit Office (NZECO) will be celebrating their 10 year anniversary of business on 2 July. As New Zealand's official export credit agency, it provides financial guarantees and credit insurance to exporters and banks to support commercially sound deals that the private sector lacks the capacity for.

Over the last decade, the NZECO has underwritten over NZD 1 billion worth of exports to buyers in over 50 countries. The transactions have ranged between a NZD 20,000 wine shipment to a EUR 45 million marine project.

"There is sometimes a misconception that the NZECO can only help large exporters or conversely only small exporters", says Carmen Moana, Manager of the NZECO. "In fact we've supported the spectrum of NZ exporters and sectors. For example of the total number of exporters supported, 25% of them have had annual turnover under $5 million, and 18% of them with turnover greater than $50 million".

A key criterion in all of these transactions is the ability for the NZECO underwriters to satisfactorily assess and approve the commercial and political risks of the transaction. The NZECO also draws on the experiences and expertise of other export credit agencies around the world.

The last three years has seen a significant increase in demand for, and utilisation of, the NZECO's products. This has been due to the introduction of NZECO's bond guarantees, short-term trade credit insurance, and short-term working capital guarantee combined with an increased demand due to the global financial crisis which resulted in a reduction in the provision of trade credit insurance and finance.

"The aftermath of the financial crisis still lingers, and the recent political unrest in North Africa highlights the importance of securing payment for your exports. At the same time, we are seeing new opportunities for NZ exporters particularly to emerging markets. The NZECO looks forward to continuing its close partnership with banks and private insurers to help mitigate credit risks, as well as to access additional trade finance or bond facilities, in order to enable our NZ exporters to secure these opportunities", says Ms Moana.

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