Australian Government has agreed to grant the Export Finance and Insurance Corporation (EFIC) additional powers to help Australia’s small to medium-sized exporters (SMEs) expand globally, announced the Minister for Trade, Warren Truss.
Truss said the expanded mandate will allow EFIC to provide financial services to help Australian SMEs to establish global supply and distribution chains.
This small addition to its powers will complement EFIC’s current programs to support SMEs, including the recently launched EFIC Headway product.
“The decision to expand EFIC’s mandate was in recognition of the new and challenging environment faced by Australian SME exporters,” Truss said.
“Now more than ever, Australian firms have to adapt to the demands and opportunities of globalisation if they are going to compete in the world marketplace.”
“The decision demonstrates the Howard/Vaile Government’s commitment to assisting
Australian SMEs overcome many of the evolving challenges they face in seeking to internationalise and go global.”
Truss said that many SMEs face difficulties in obtaining commercial financial assistance to drive their expansion.
“Some financial institutions within Australia are reluctant to support the overseas activities of Australian SMEs, while overseas banks may not be familiar enough with Australian SMEs to provide them support in these markets.”
“For SMEs falling within this funding gap, EFIC might be able to assist,” Truss said.
Eligibility for EFIC support will be based on a new benefits test. It will allow EFIC to take a range of factors into account to provide financial and insurance facilities to an SME such as dividend flows, revenues or access to new markets.
Truss said the benefits test is more relevant to the way many exporters now do business.
“The expansion of EFIC’s mandate will require changes to the EFIC Act. The process to change EFIC’s legislation will commence shortly,” he said.
EFIC is Australia's export credit agency and supports Australian exporters and overseas investors by providing finance, finance guarantees, insurance and bonding facilities.