Trade Minister, Simon Crean, has announced an expansion of the role of the Export Finance and Insurance Corporation (EFIC).
Once legislated, the change to EFIC’s role will allow it to provide financial support to a wider range of transactions for Australian SMEs exporting or investing overseas, including those establishing global supply and distribution chains.
Crean said the changes reflected the increasingly sophisticated role Australian businesses play in the global economy and would help them respond to the global recession.
“Australian exporters face many challenges and find it difficult to access finance for expanding their operations internationally,” he said.
“Expanding EFIC’s powers to better support Australian exporters will give a boost to this growing and dynamic sector of Australia’s economy.”
In welcoming the announcement, EFIC CEO and MD Angus Armour said, “We’re delighted to have the opportunity to assist Australian companies exporting and investing overseas in providing finance and insurance for a broader range of transactions.
“This should offer long-term benefits to Australian exporters, but is particularly important now, when banks and other commercial financial providers are reassessing their risk profiles.”
“The 2009 EFIC Global Readiness index (GRi™) showed that access to finance continues to be the most significant barrier faced by Australian businesses going global.
“This expansion of EFIC’s ability to support Australian SMEs is a direct response to the globalisation of markets and the growing participation of Australian businesses in it.”
When the changes are made to EFIC’s legislation, EFIC will be able to provide loans to Australian SMEs investing in productive offshore operations, allowing them to serve existing export customers better as well as tap into new foreign markets.
This broader ability to lend will allow EFIC to assist Australian SMEs to establish global supply and distribution chains and harness the opportunities from this important new way of trading.
The amendments will also simplify the legislation, streamlining access and reducing compliance costs for applicants. When assessing transactions for its support, EFIC will continue to apply rigorous due diligence and other processes.