By Andreas Schild, RBI |
How a digitized financing solution called eSpeedtrack makes export financing possible for transactions from EUR 2 to 10 million
So far, importers had a very hard time finding buyer’s credit financing for amounts up to EUR 10 million. Banks have mainly concentrated on big-ticket export transactions leaving the lower market segment entirely untouched. In order to compensate for the lack of financing and to support their sale, exporters had no chance but to offer extended payment terms themselves or sell their receivables, which often left them with the non-payment risk.
On a regular basis, professionals of the export industry meet to get updates on the market and to be informed about new business trends. When Petra Rauscher, Head of Global Export Finance at Raiffeisen Bank International joined one of these conferences back in 2018 there was one topic that came up again and again: “Everyone was telling me that there were so many exporters and importers desperately looking for financing of smaller ticket transaction in export financing. The truth is that nobody has reacted to this demand so far. So, I thought we need to do something about it.”
Together with her team of export finance experts she dived deeper into the topic. “We found that there were two major obstacles for banks to offer small ticket transactions. The one is that bank’s processes concentrate on the big tickets resulting in relatively high internal costs and the second is that back and forth of communication takes too much time, both making the overall process complex and time consuming.”
The response to all these problems is eSpeedtrack, a digitized buyer’s credit solution for export transactions between EUR 2 to 10 million. “We streamlined our internal processes, standardized the project and introduced our digital online platform,” explains Rauscher. Both the importer and the exporter can now place financing requests on the eSpeedtrack online platform to provide all necessary project information and receive a term sheet.
For export finance transactions so called Export Credit Agencies in the exporters’ country provide a guarantee for the transaction. These institutions mainly act on behalf of the state and have a very good credit rating. Their guarantee makes export transactions bankable and affordable to the importer. eSpeedtrack includes export credit agencies in the process. RBI is currently working with all major Export Credit Agencies in Europe.
Importers can now receive long-term financing at favorable pricing also for lower volume export transactions. This supports exporters with the sale of their products also into sometimes difficult markets. RBI is making direct payments to the exporter in line with the payment terms of the export contract.
RBI has also digitized the know-your-customer process, provides customer video identification, online account opening and eSignature of contracts. Customers of eSpeedtarck can benefit as all RBI digital services are integrated into one platform.
Siemens Industrial Turbomachinery AB “For large-volume projects, eSpeedtrack financings are of interest as well caused to supplemental investments and deliveries necessary for large transactions which were not included by delivery.”
OeKB “eSpeedtrack is a smart product which opens the door to the world of export financing and reduces entering barriers. That‘s why new target audiences can be approached and get serviced.”
Andreas Schild is Senior Expert for Global Export Finance at RBI.