Exporters

Offering credit has become an increasingly competitive factor in international trade, in the same way as price, quality and expertise. The New Zealand Export Credit Office (NZECO) aims to assist New Zealand exporters to secure larger deals by enabling them to offer competitive finance terms beyond one year.

Many of New Zealand’s competitors are using export credit products, with virtually all major trading nations operating sizeable export credit agencies.

The NZECO insures the risk of non-payment by a buyer due to specified commercial or political risks. The NZECO does not provide the actual loan nor does it directly finance the credit. As is the case with all export credit arrangements, the exporter or their bank will normally be expected to share a degree of the credit risk.

The role of the NZECO is to complement rather than compete against the credit insurance products offered by commercial providers. This is generally the case for medium and long term cover (between one and fifteen years), particularly for exports to countries with a higher degree of commercial and political risk.

Short term credit cover (less than one year) for export deals should be obtained either directly from the private insurance market or through a bank. See Trade Credit Insurers or Bank Contacts for contact details.

Benefits of NZECO’s Insurance

Benefits for a New Zealand exporter include:

• The opportunity to secure new or larger export sales through the ability to offer extended finance terms to their international buyers;
• Reduction of financial risk, with payment guaranteed by NZECO:
• Up to 95% cover against non-payment arising from defined political risks;
• Up to 90% cover against non-payment from defined commercial risks;
• Enables exporting into new markets with more confidence;
• Option of receiving payment upon delivery, by assigning the NZECO insurance policy to a financer / bank (who pays the exporter upfront and receives the buyer’s payments over time);
• Enables increased access to working capital cash flow;
• Option of pre-shipment cover for risks during the design / build period.

You are welcome to contact the NZECO when planning a new export transaction. We will explain how we can help you, and can provide an assessment of the country you are selling to. We can also provide you with an NZECO letter of support that describes the type and tenor of export credit that the NZECO could guarantee you with.