https://www.creditreform.de/pforzheim/creditreform/kontakt

The corona pandemic is shaking up the global economy and confronting export companies with existential questions: Will the customer pay abroad or is he already in trouble? The Federal Government covers major export transactions with state export credit guarantees. Fintech now offers interesting solutions for small orders from 100,000 euros upwards.

Over the past decades the world has become smaller. Before the Corona crisis it had shrunk to a global village. In global trade the business of German exporters flourished. But now the global economy and foreign trade have come to a standstill. And this poses great difficulties, especially for small and medium-sized German companies. At present they have to think very carefully with whom they still do business abroad or whether they should stop exporting to largely unknown markets. Because when trading goods across borders, there is a problem: the supplier would like his money immediately, while his business partner wants the goods as quickly as possible. But many foreign importers can only pay later or would like to finance the purchase.

For a long time now, the state has been covering the resulting risks with export guarantees. They are handled by Euler Hermes as mandatary of the Federal Government. The insurance policies are available in a wide variety of forms to all German exporters and their financing banks. The guarantees are designed to cover economically and politically induced bad debt losses. For this purpose risk-based premiums are required.

In 2018, for example, German exports in the amount of 19.8 billion euros were covered - 17 percent more than in the previous year. Deliveries and services to emerging and developing countries accounted for the majority of the cover volume, at almost 75 percent. The surplus from this business amounted to 166 million euros. In the first half of 2019, export credit guarantees totalling 8.7 billion euros were granted. In the ranking of export destinations, Russia, Italy and Turkey lead the way. China, Brazil and Egypt are also among the top ten countries covered by Hermes. Up to now, however, the Federal Government has concentrated on the coverage of large orders of five million euros and more.

Around the world with small tickets
What many exporters don't know is that for almost two years now they have been able to use state export guarantees and private export credit insurers to finance and insure their international business even for so-called small-tickets, i.e. orders worth less than five million euros - thanks to digitalisation. According to the German Engineering Federation (VDMA), these small orders account for about ten to 15 percent of the German export volume. The product available since July 2018 is called "Hermes Cover click&cover EXPORT". February 2019 also saw the launch of a digital product for banks offering small ticket financing for exports. Here, Landesbank Baden-Württemberg (LBBW) and the specialist bank AKA Ausfuhrkredit-Gesellschaft are playing a leading role. One and a half years ago, the latter set up a digital application system for Hermes-covered buyer credits of between one and ten million euros. Name: SmaTiX. The exporter is guided through the procedure in four steps and, in the best case, immediately receives a financing indication including a repayment schedule. "He can present this financing solution to his customer," explains Armin Wittemer, who is responsible for platform and product development at AKA-Bank. "The importer also becomes our contractual partner." Thanks to an interface between SmaTiX and click&cover EXPORT, data can be exchanged between the two application lines. To register for SmaTiX, the exporter can contact his house bank or one of the 17 AKA shareholder banks.

Fast and unbureaucratic
The Fintechs that are active in the small-ticket segment include HandEX, TraFinScout and Tr8fin. They are focused on small and medium-sized companies. "And they usually need sums of between 100,000 euros and five million euros for their foreign business," explains Patrick Kupitz, co-founder of the Hamburg-based platform HandEX. "Worldwide, about 50 percent of credit requests that fall within this range are rejected by banks." This situation has been criticised by leading associations of the German economy such as the Federation of German Industries (BDI) and the VDMA for years. They also demand that applications for export financing become less bureaucratic. Kupitz: "Rightly so, because SMEs complain time and again that the application process is complicated and analogous". His start-up, in which the High-Tech Gründerfonds has invested, promises a simpler process. To this end, the Hamburg-based company has largely digitalised the individual steps for the customer and the internal processes. Example: the "Know Your Custom