Can you assess the current market situation from the perspective of an exporter?
The situation is dynamic and influenced by several factors. Global trade relations are changing due to geopolitical tensions, trade agreements and changing consumer preferences. At the same time, new opportunities are emerging thanks to digital technologies and the growing demand for sustainable products. Exporters also face challenges such as inflation, changes in exchange rates and logistical problems. It is therefore important that they have a flexible strategy and keep up to date with current market trends so that they can effectively exploit new opportunities and minimise risks.
Tatiana Harmady is Director of the Financing Department at EXIMBANK SR.
How do Slovak exporters perceive this situation?
In our daily communication with exporters, we feel that they are most worried about interest rates, as EURIBOR has gone up extremely, and therefore their interest costs are also rising. Therefore, they are always pleased when we can offer them a discounted interest rate. In 2019, EXIMBANKA SR started to draw funds from the European Investment Bank – the so-called EIB line – and then we lent them to clients. This EIB line is mainly intended to support small enterprises with up to 250 employees, as well as medium-sized enterprises with 251 to 3.5 thousand employees, and its main benefit is a preferential interest rate. Thus, we are able to cover a large part of companies within the Slovak market. On the basis of the client’s internal evaluation and his project, the interest rate will be calculated, on which we can give him a discount of at least 0.25 per cent. EIB clients used the EIB line extensively in the pre-covid period and, given the current market situation and interest rates, it is an increasingly interesting solution for them.
Is the interest rate advantage limited by segment or territory?
The excluded segments are relatively very few, such as tobacco products or the defence industry. However, most clients can take advantage of the interest rate advantage. It cannot be granted only if the client draws on other resources, such as a non-repayable financial contribution. In that case, we can provide a variety of products, but without this discount. As far as the territories are concerned, each business case undergoes an individual assessment, both in terms of structure and costs. We are guided by international rules, current sanctions and so on. However, the EIB line is primarily intended to support exports to European Union markets.
Which segments are you seeing the most interest from and which regions are they exporting to?
Definitely from the engineering and metallurgical sectors. Recently, the food and clothing industries have also been reviving. If we talk only about the EIB line, they export to the Czech Republic, Austria, Hungary, Finland, the Netherlands and Denmark. With other products, however, we support exports all over the world.
What is the specificity of the EIB line?
It is not a product, but an interest-rate advantage. For example, the client is interested in operating or investment financing. We will prepare a tailor-made solution from our products and, in addition to that, we can also take advantage of a rate discount within the EIB line. This saves a minimum of 0.25 per cent. The likelihood of the client getting the discount is high, and almost everyone will get it.
What kind of loans are we talking about and what is their maturity?
On average, we are talking about loans of several hundred thousand, but we also apply the discounted interest rate to loans of 50 thousand or millions. Their maturity depends on the product. For operational financing, it is up to two years with the possibility of re-approval. We have clients who have been with us in this way for more than 15 years, with the aforementioned interest rate advantage since 2019. For investment loans, we are talking about a maturity of seven to ten years.
Do you support only Slovak exporters?
With the EIB line, yes. For other products, we can finance a Slovak exporter, including its foreign subsidiaries. In that case, it is an investment abroad, which is a frequently used product.
You are an export credit agency. What advantages does a client have with you compared to a commercial bank?
I would like to stress that we fulfil a complementary function. This means that the client uses us when the commercial bank cannot or for some reason is not interested in increasing the client’s credit exposure. It could be for limits, sector or territory. This is when EXIMBANKA SR steps in. I have to say that commercial banks are happy to cooperate with us because we are not a competitor for them, but rather a partner.
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