Exporters seek new State credit guarantee plan
Exporters are calling for the return of a State-backed credit guarantee scheme that the government ditched following controversy in the 1990s.
The call comes as new figures yesterday show that the value of goods and exports sold abroad hit a record €183 billion last year.
The State used to provide credit insurance for exporters selling goods to risky markets, but the the scheme was abandoned following claims in the early 1990s that a number of operators in the meat processing industry were abusing it.
Irish Exporters’ Association (IEA) chief executive John Whelan yesterday said such a scheme, which compensates exporters if a customer fails to pay them, would aid companies selling goods into key emerging economies, and help sectors such as the food industry to increase business from overseas markets.
“I think we threw the baby out with the bath water,” Mr Whelan argued yesterday.
He said that the original scheme was probably too open, and suggested that its replacement could involve a partnership between the State and a private sector player. He added that most countries provide support to exporters.
Mr Whelan said many exporters selling goods abroad, particularly to the so-called Bric – Brazil, Russia, India, China – economies, are having difficulty getting working capital from banks. A credit guarantee would help provide the security that they need when approaching lenders.
He said its absence was hindering growth in the Bric markets, where the Republic is underperforming.
The IEA’s figures show 4.9 per cent of Irish exports go to these markets, compared to 20 per cent from the EU.
Three commercial companies, all multinational, provide export credit insurance, but their approach is determined by head office and is not necessarily suited to the needs of many Irish exporters.
Exports from the Republic grew 5 per cent in value last year to a record €183 billion, mainly driven by a strong performance from services, whose value grew 11.1 per cent to €90.5 million.