Many OECD countries have introduced into their official export credit systems special schemes and services provided through export credit agencies to assist smaller exporters. These initiatives include information programmes, fast-track application procedures, and special export insurance, guarantees and other products. SME programmes were in part prompted by the difficulties encountered by smaller enterprises in applying for and receiving export credits and related services. Complaints from smaller firms included burdensome procedures and paperwork, the high cost and complexity of policies, the lack of adequate risk coverage, insufficient export credits, and the need generally for more support for small exporters.
Financing is essential for international trade and the world's official export credit agencies play a vital role by providing, guaranteeing and insuring such finance. The OECD administers the Arrangement on Guidelines for Officially-Supported Export Credits, the only international agreement on disciplines regulating the provisions of official export credit support. The information contained in this document is a summary of the findings of a survey completed by the 26 Member countries of the OECD Working Party on Export Credits and Credit Guarantees, which is mainly concerned with medium- and longer-term export credit business (over two years) rather than shorter-term (under two years). It presents initiatives being taken to encourage the globalisation and export activities of small firms, including streamlined processes, information services and special export-related products.
Defining small exporters
The lack of a common definition of a small and medium-sized enterprise (SME) complicates analyses and comparisons of policies for small firms, including those relating to export credit products and services. In general terms, SMEs are non-subsidiary, independent firms which employ fewer than a given number of employees. But this number varies across countries. The most frequent upper limit designating an SME is 250 employees, as in the European Union (EU). However, some countries set the limit at 200 employees, while the United States considers SMEs to include firms with fewer than 500 employees. Financial assets may also be used to define SMEs.
With regard to export credits, most countries define small exporters by the number of employees, the value of sales or turnover, or some combination of these (Table 1). Several European countries use the common EU definition: firms with less than 250 employees, either an annual turnover not exceeding EUR 40 million or an annual balance-sheet total not exceeding EUR 27 million, and those conforming to the criterion of independence (i.e. not owned as to 25 % or more of the capital or the voting rights by one enterprise, or jointly by several enterprises). Some countries have different definitions within their export credit schemes according to the size of the firm (e.g. Canada) or for SMEs in different industrial sectors (e.g. the United States).
Countries differ in whether they include small sub-contractors as eligible for export credits and services. Four countries (Australia, Canada, Mexico, Poland) do explicitly include small firms acting as sub-contractors. Canada's Export Development Corporation (EDC) has several umbrella short-term credit insurance policies in which SME exporters are indirect customers or could be considered sub- suppliers to the main policy holder. For medium-term credits, EDC has Specific Transaction Sub- Supplier Insurance, which covers sub-suppliers to an export contract. Australia also considers sub- contracted small exporters for its programmes. However, the majority of countries do not extend such treatment to sub-contractors. For example, the Export Credits Guarantee Department (ECGD) in the United Kingdom prefers to assist SME exporters directly rather than through a "trickle-down effect" where large companies sub-contract business underwritten by ECGD to smaller companies.