Export credit extended for three more years

Friday 21st January 2011

The government has extended the full range of support the New Zealand Export Credit Office (NZECO) provides to exporters for another three years, Finance Minister Bill English said.

"As the recovery takes hold, exporters still face difficulty getting the trade credit and financial guarantees they need to maintain existing overseas markets and establish new ones," English said.

"The Government has made it clear that one of the best ways to ensure New Zealand grows strongly out of the recession is to increase exports and investment. We are doing all we can to help exporters and ensuring they have the credit insurance and trade finance to maximise opportunities that flow out of the fragile global recovery is a crucial part of that."

English said New Zealand is well placed to benefit from increasing demand for quality products and must ensure exporters have the full range of tools needed to trade with the rest of the world.

The decision to extend the mandate of the Export Credit Office to June 30, 2014 follows a review of its function and performance.

The Government will also extend the NZECO's ability to provide short-term credit insurance, which it began offering in 2009 as a temporary measure for exporters affected by the global financial crisis, for another three years.

It was previously set to end after June 30, 2011.

In addition the Government has provided NZECO with greater flexibility in the way it operates by removing individual limits on specific insurance products as long as it remains with its total $740 million maximum risk exposure, extended its authority to support new Zealand subsidiaries overseas and authorised it to share risks with other export agencies.

"This extra flexibility will enable NZECO to respond to demand, while reducing its administrative burden," English said.

The NZECO was established in July 2001 to offer financial guarantees and insurance to exporters and banks, and to support commercially sound deals that the private sector lacked the capacity of appetite for.

It has supported more than $1 billion of total exports since its establishment.

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