One hundred SME:s became new EKN customers

Demand for EKN’s guarantees has been high. The number of applications spiralled during the second half of the year. Awareness of EKN continues to grow among companies and banks.

The year was marked by continuing high demand for EKN’s guarantees from small and medium-sized export companies and local bank branches. The total number of applications was 767, which is an 18 percent increase on the 2007 figure of 648. The rise in applications was sharper in the second half of the year. The financial crisis in the autumn and an impending recession have had a major impact on small companies' ability to conduct business transactions and obtain risk cover. Risk capacity on the private market has been very limited at times.

There has been a considerable influx of export companies contacting us, and EKN attracted 100 new customers in 2008, most of them small companies.

We have guaranteed export transactions involving goods and services from a wide cross-section of industries, including engineering products, food, commodities, steel, paper, chemicals and environmental technology. We have also guaranteed all types of business formats from standard transactions with short credit periods to more complex formats with longer credit periods. The four countries for which EKN issued the largest number of offers were Nigeria, Iran, Sweden (for working capital guarantees where Swedish companies are the counterparty) and Russia.

More counter guarantees and working capital guarantees, but more losses too

Application statistics show that bank lending to small companies has been restrictive recently. Demand for counter guarantees, which shift some of the banks’ risk on the exporters, fell sharply in the latter part of the year, but showed an increase for the full year. Demand for working capital guarantees was more stable and increased during 2008. The working capital guarantee is aimed at helping companies obtain a better capital supply, but can only be used to supplement capital borrowed from a bank.

The fact that the global economy has deteriorated was also reflected in the increased number of delays in payments in the latter part of the year. In addition, the volume of indemnifications to small and medium-sized companies, which had hit record lows in recent years, increased to almost SEK 40 million, compared with SEK 3 million the previous year. Two losses out of 17 accounted for approximately 80 percent of the volume of indemnifications paid.

Market initiatives pay off – awareness of EKN increases

Awareness of EKN and our guarantees used to be relatively low among small and medium-sized companies. In spring, for the third year in a row we conducted a nationwide survey of small and medium-sized companies and local bank branches to measure their awareness of EKN and our guarantees. It was encouraging to note that our market initiatives in recent years have borne fruit. Companies’ knowledge about EKN has increased by a total of 16 percent over the last three years. It was particularly positive to note that our initiatives targeting local bank branches around the country have resulted in knowledge about our guarantees increasing by a massive 150 percent since 2006. The local bank branches are an important target group and represent a channel for EKN’s work in promoting small companies' exports. In the autumn, we visited some fifty banks around the country.

Autumn also saw the start of a series of seminars, at which we, Almi and the Swedish Trade Council explained to export companies and banks how our organisations can help them conduct more business transactions, and safer ones too. The seminars attracted keen interest and were greatly appreciated, and we will continue to hold them in several locations in 2009. We follow up the seminars by sending out information. This ensures knowledge about EKN is retained, and also allows us to establish contact with companies and banks for further discussion on concrete business transactions.

As in previous years, we also took part in a number of export seminars and meetings to which banks and other organisations invited their customers for information-gathering purposes.

Cooperation with other promoters

EKN is committed to increasing its cooperation with other export promoters. For a few years now we have had strategically important collaboration with Almi, whereby their subsidiaries around the country are able to issue EKN’s counter guarantee and working capital guarantees.

The Export Loan, which was introduced in 2007, is the result of cooperation between EKN, Almi, the Swedish Export Credit Corporation, the Swedish Trade Council and Swedfund. The loan, which is managed by Almi, is aimed at facilitating financing of small and medium-sized companies’ export activities. In 2008, export loans totalling over SEK 150 million were granted to 29 companies.