The Government is to review its export credit reinsurance services after a steady increase in the number of companies using private-sector insurers.
The Export Credits Guarantee Department short-term export service was sold to insurer NCM in 1991. The ECGD still covers medium- and long-term projects and risky countries such as Iran and Macedonia. `We agreed in 1995 that the safety net would continue, but the truth is that the facilities are not widely used,’ said a spokesman.
But the private sector may not want to cover more difficult markets. A source at NCM said: `I would have guessed that the more long term you get, the less likely it is that you would get insurance.’
The ECGD could be made more friendly to small businesses, according to the Confederation of British Industry. Small exporters have been discouraged in the past by the ECGD’s high rates of interest.
* Penalties for late commercial payments across Europe have been agreed by EU industry ministers. Companies failing to pay debts within 30 days could be charged interest at an annual rate of 8.5%. The legislation is expected to come into effect in 2002 or 2003.