Background

• EKF (the Danish Export Credit Agency) will support Danish companies through two new business policy instruments
• These are a liquidity guarantee, and a reinsurance policy
• More details on both as follows

Liquidity guarantee

• New liquidity guarantee created by EKF to support small and medium-sized companies
• New loans of DKK 1.25bn will be granted
• Expected to help 250 small and medium sized companies
• EKF will cover a significant proportion of the bank's potential losses on new loans, to help exporting companies who might be late on payments or lose out entirely on payments
• This guarantee will be simpler and better in its risk coverage, according to the government
• As the loans the SMEs have will be guaranteed by the EKF, the banks will face less risk
• The loss limit is set to DKK 100m
• The scheme needs to be approved by the EU commission
• Example: a Danish subcontractor delivers goods to a German company, who fails to pay. Could also be a Danish production company that cannot receive certain goods from suppliers abroad and therefore cannot continue production.

Reinsurance

• Private insurance companies will face increasing difficulties in insuring export orders due to market volatility
• EKF will therefore act as an insurance company for the insurance companies, so that Danish exporting companies can continue to insure their orders
• EKF can cover up to 90% of credit insurance companies' risk on new export orders