In a situation of rapidly changing credit and payment risks and with a wealth of finance schemes available to the exporter, it is vital to be well informed about the finance mechanisms obtainable. To this end, a thorough appraisal of non-recourse export finance mechanisms was carried out with special emphasis placed on the needs of exporters and the problems of export credit risks. Extensive research provided detailed information on the facilities available from the financial institutions and on the exact requirements of a wide range of exporters.

Exporters need 'simplicity and flexibility, as well as certainty, in export payment mechanisms', according to the UK treasurer of Air Products. These would be satisfied by the use of 'a fresh and open mind to ensure seller and buyer get what they require, packaged in the most effective manner', says the Director of Lloyds Trade and Project Finance.

In order to assess the international competitiveness of the national export credit systems in France, West Germany, Japan, the UK and the US, each was examined. The findings were that the cost and quality of export credit insurance cover varies from one system to another: for example, the French and Japanese systems offer substantial resources which may be used to provide low-cost finance to certain overseas buyers. At the same time, it was possible to identify imperfections in the arrangements that regulate the international export finance environment which may distort competitiveness.

Current developments are likely to have a profound impact on the international export finance environment. The most significant issues are a move towards tighter control of export credit subsidies, industry and institutional restructuring in the prelude to 1992 and basic changes in risks as a result of reforms in Eastern Europe. Analysing the information obtained revealed three problems faced by exporters that force them to consider non-recourse export finance: the financing problem, the export credit risk protection problem and the problem of competitiveness in the goods market. While some exporters solved these problems without external assistance, others turned to the non-recourse export finance schemes provided by the financial institutions.

However, discrepancies were noted between the needs of exporters and the facilities provided by non-recourse export finance. The needs of the small, fast-growing exporter are not satisfied completely by the schemes available: a new non-recourse export finance mechanism is therefore required.

To this end modifications to the export credit risk protection are proposed which should ensure that schemes are available for the exporter with a low exposure to certain export credit risks. These modifications will be of particular interest to exporters facing the financing problem. At the same time, an enhanced range of peripheral facilities is recommended.

Improvements to medium- and long-term government-supported export credits are also put forward; these are for where the revenue generation profile of the goods supplied is inconsistent with the repayment terms required by an officially-supported credit. These improvements will interest those exporters facing the problem of competitiveness in the goods market.