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The trick that helps German export companies in tough times – which Swedish companies can also use

Published: November 18, 2022, 4:47 p.mIn countries like Germany, credit insurance is a standard solution for exporting companies. In Sweden it is not nearly as common. What is the reason? Thorsten Metzner from the Export Credit Board, EKN, explains why and what Swedish exporters can gain from using the tool more – not least in tough times.Read more about how you can secure financing for your continued growth You have 25 years of experience from the banking and credit insurance industry in Germany and Sweden. How do you see the differences between the countries?– The banking and credit insurance industry looks completely different in many ways in Sweden and when I moved here I was surprised by how unusual it was to use credit insurance here. In Germany, it is a standard solution for exporting companies.Why is credit insurance so popular in Germany?– They reduce the risk of not being paid by the end customer, ensure cash flow – which creates security in liquidity planning – and are largely a prerequisite for using invoice financing solutions in Germany. Credit insurance also raises the quality of the companies’ accounts receivable, which optimizes the companies’ rating and gives them better loan terms. Then, one should not forget that the approval process for the credit insurance itself is a quality check. If an end customer is denied credit insurance, it is a valuable warning bell for the company.Why do you think credit insurance is a less common tool in Sweden?– Credit insurance is basically a way of limiting risks and I think that the Swedish approach to risk differs from the German one. Sweden was not hit as hard by the financial crisis as Germany and many of today’s Swedish business leaders have only seen good times in the market.There is a link between Germans’ use of invoice financing and the popularity of credit insurance in Germany. Can you tell us about it?– In Germany, invoice financing, above all selling one’s invoices without recourse, which means that the risk of non-payment is transferred to the company that buys the invoices, is a very well-established form of financing for all kinds of companies. Private companies that want to offer invoice financing services need to cooperate with credit insurance companies with regard to legal requirements. In Sweden, invoice financing is not nearly as popular. I would say that Sweden is a few steps behind many European countries here.Would you like to see more Swedish companies discover credit insurance?– Yes, not least now. We are facing the most challenging and uncertain market situation since perhaps the Second World War. Now it is especially important to secure one’s assets – and accounts receivable are one of the most valuable assets that companies have.What types of business can EKN insure and when should you turn to a private operator?EKN’s guarantee for accounts receivable can be used to insure short or long and large or small trades. However, it cannot be used for business to high-income countries where the credit period is less than 24 months. If you want to insure that kind of business, there are several private companies to turn to.Read more about how you can get help with financing your export venture

Thorsten Metzner

Thorsten Metzner worked in the German banking and credit insurance industry for twelve years before moving to Sweden in 2007. Here, he has worked as a corporate and trade finance specialist for the private credit insurance company Coface and as a consultant in the banking and credit insurance industry. In 2015, Thorsten Metzner started at EKN where he is today a Senior Underwriter and works with insuring Swedish export companies and banks against the risk of not getting paid, so that they can carry out more safe export deals. The article is produced by Brand Studio in collaboration with EKN and not an article by Dagens industri

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