Business operations

By providing financing, Finnvera wants to influence the competitiveness of Finnish enterprises - their opportunities to operate and grow in Finland and to enter international markets. The State of Finland covers some of Finnvera’s credit and guarantee losses. This enables us to provide financing at higher risks than banks usually can.

SME and midcap financing

The financing needs of SMEs depend on enterprise and project size and on the stage of the enterprise’s life cycle. Finnvera provides financing for enterprises at their start-up, growth and internationalisation stages.

In 2016 the greatest effort in SME financing was the implementation of the programme for transfer of ownership. In April, Finnvera and enterprise organisations launched a joint campaign to speed up transfers of ownership in SMEs. The campaign increased enterprises’ awareness of issues such as valuation and taxation. In consequence, Finnvera’s financing for transfers of ownership reached a new record totalling EUR 141 million, which means a rise of 21 per cent on the previous year. In 2016 approximately one thousand companies received financing for the changes of ownership from Finnvera. It is estimated that Finnvera is involved in every third company acquisition. The campaign will also continue in 2017, and the financing granted for transfers of ownership is expected to remain at the same solid level as in 2016.

All in all, Finnvera provided a total of EUR 1,040 million for SME and midcap enterprises during the past year. Loans and guarantees accounted for 963 million of the total financing. The change was -6 per cent when compared against the previous year.

In 2016 Finnvera received 12,500 applications for financing from SMEs and midcap enterprises. Of these, about 80 per cent, or 10,300 applications, received a positive decision. The value of guarantees granted to SMEs for exports totalled EUR 77 million, or 16 per cent less than the year before.

At the end of 2016, Finnvera’s total exposure for SME and midcap financing stood at EUR 2.6 billion, or 4 per cent less than the year before. The number of client enterprises that went bankrupt or wound up business totalled 872. The change on the previous year is +5 per cent.

Emphasis on financing growth and internationalisation

Finnvera’s goal has been to shift the focus of SME financing increasingly to growing and internationalising enterprises. This effort has succeeded. The share of internationalising enterprises out of all SME financing rose from 34 per cent in 2015 to 38 per cent in 2016. The absolute increase was EUR 22 million.

In spring a new product – the Growth Loan – was launched for growth companies. The loan is intended for financing growth and internationalisation projects or corporate reorganisations that are important for SMEs and midcap companies. The idea is that the loan would attract financiers operating on market terms to invest in projects where risks are high but profitability and effectiveness are deemed to be good. In 2016, demand for the Growth Loan comprised a couple of dozen projects.

After five negative years, the investments of companies seeking growth on international markets showed an upswing. This can be considered a signal that companies’ trust in investment has improved. This is a positive observation, since the trend of the Finnish economy and exports has so far been very modest. Although the amount of financing sought for investments increased by 5.8 per cent on the previous year, the greatest need still focused on working capital.

It is to be expected that SMEs’ improved economic outlook will be reflected in the financing granted by Finnvera in 2017 for both growth companies and internationalising companies. It is generally believed that SMEs will be slightly more active on the bond market, and we believe that this will also be seen in Finnvera’s financing.

More active customer work

During 2016 Finnvera became markedly more active in its contacts with customers and stakeholders. There were over four thousand meetings during the year. We believe that our own active approach has contributed to the increase in financing projects, especially as concerns transfers of ownership. It is important for us to work closely with our customers to identify financing needs. Vibrant enterprise activities are the only way of getting much-needed growth and exports to Finland. Thus, in terms of the whole economy, it makes sense that no profitable project should remain without financing.

In October, Finnvera adopted regular and continuous measurement of customer experience. When more measurements are done in real-time, more accurate information is obtained about customers’ service expectations. On the basis of the measurement results, we can develop our services so that they are even better suited to the expectations of various customer groups. The first results, obtained late in 2016, are encouraging. We believe that our input in digital services will make for increasingly smooth customer service. Digitalisation also promotes the consistent quality of decisions and the efficiency of operations.

Finnvera is a member of the Team Finland network, which has the objective of promoting the internationalisation of SMEs. In the past year, the network continued to develop its services. The most concrete form of cooperation was the adoption of the domestic service model, which was used in 2016 to present 373 service proposals to potential growth companies. In the service model, the various Team Finland actors see to it that the customer gets all the necessary services available through the network. Customers have given positive feedback, and the development of the model will continue in 2017. Another project launched during the past year was a project to create a joint management system for customer data. It will be taken into use in 2017. Team Finland cooperation also got a boost when Finnvera, Finpro and Tekes relocated to joint premises in Team Finland House, situated in the Ruoholahti district of Helsinki, in August 2016.

Financing granted by sector 2016

Financing granted by sector in 2016
Rural trades Industry Tourism Services to business Trade and consumer services
16.7 534.1 68.4 189.9 154.1


Over 70% of financing offered went to growth companies, start-ups and transfers of ownership.

Ownership changes

Ownership changes
  2012 2013 2014 2015 2016
Ownership changes 117.9 107.9 87.6 116.5 140.9


Summary by business segment

  Loans, domestic guarantees and export guarantees offered Export credit guarantees offered Total financing offered
 1 Jan–31 Dec 2016
Outstanding commitments 31 Dec 2016 Clients 31 Dec 2016
Locally operating small companies 140 0 140 360 17,446
SME's focusing on the domestic markets 493 11 504 1,393 9,170
SMEs seeking growth through internationalisation 330 66 397 814 1,005
Large corporates 0 4,242 4,242 18,120 91
Total 963 4,319 5,283 20,687 27,712


Large corporates

Finnvera promotes Finnish exports by providing export credit guarantees and export financing solutions for enterprises and for banks that finance exports. Finnvera’s solution may be an export credit guarantee for a bank to cover export and project risks, credit insurance to the exporter for short-term exports or for pre-delivery risks, or financing of export credits and interest equalisation.

Finnvera’s subsidiary, Finnish Export Credit Ltd, is able to offer fixed-rate or floating-rate financing for export and ship credits based on Finnvera’s funding. In addition, Finnish Export Credit manages the interest equalisation system for officially supported export credits, which improves the opportunities of financial institutions to arrange long-term and fixed-rate financing for exports. In interest equalisation, the bank serving as the arranger of the export credit finances the credit and signs an interest equalisation agreement with Finnish Export Credit.

At the end of 2016, Finnvera’s exposure for export credit guarantees totalled EUR 18.3 billion, or 6 per cent more than the year before.

The total value of the new applications for export credit guarantees received in 2016 was record-high, EUR 14.6 billion (9.7 billion). The great demand is explained, in particular, by vigorous growth in the orders received by the Finnish shipbuilding industry. For other sectors, demand for export financing has remained stable. Especially the telecommunications and forestry sectors have many projects in the pipeline. The guarantees granted in 2016 totalled EUR 4.3 billion (6.6 billion), and the guarantees that came into effect totalled EUR 1.5 billion (5.6 billion). Western banks consider carefully before granting credits with long repayment periods. This underlines the importance of financing provided by Finnish Export Credit, in particular. New credit agreements signed by Finnish Export Credit amounted to EUR 231 million.

The year 2016 brought new countries onto Finnvera’s map of destinations, as it became possible again to take risks for exports to Argentina and Iran. Owing to its long period of isolation, Argentina has many needs for renewal. Business opportunities have opened for Finnish companies, for instance in the development of infrastructure. In contrast, demand for Russia has fallen because of the country’s weak economic situation and sanctions.

In 2016, Finnvera invested in the promotion of small export transactions by developing its products. The revised Bill of Exchange Guarantee was adopted in spring. Measures to boost small export transactions will continue in 2017.

Authorisations were raised considerably

The rapid rise in orders won by the shipbuilding industry, stricter bank regulation and stiffer competition have increased demand for export financing. Increasingly many buyers expect export credit guarantee and export financing solutions to back up the exporter’s tender. In consequence of the great demand, the Government of Finland decided to propose a marked rise in the ceiling for Finnvera’s export credit guarantees, first in spring from EUR 17 billion to 19 billion and further in autumn to EUR 27 billion. The last raise was approved by Parliament at the turn of the year. The authorisations to provide financing and interest equalisation were raised at the turn of the year as well, to EUR 22 billion. Thanks to the raised ceilings, Finnvera can continue to provide Finnish export companies with internationally competitive financial arrangements promoting export transactions.

Higher exposure means that Finnvera must be increasingly active when managing risks. Reinsurance with either colleague credit agencies or private reinsurers is a pivotal means of risk management. Finnvera also has access to portfolio reinsurance that covers a number of risks.

The client’s partner

Financial arrangements are a key factor in business negotiations conducted by many large Finnish corporations. In 2016, Finnvera was an active participant in meetings with foreign customers and in trade missions together with Finnish enterprises.

In autumn 2016, we launched an increasingly active and real-time system for measuring customer experience. The first measurement results for large corporations will be available in spring 2017.

Effectiveness and responsibility

Alongside the increased exposure and authorisations, Finnvera’s impact, and the assessment of this impact, will be more important than ever. In 2016, the Ministry of Economic Affairs and Employment commissioned a comprehensive evaluation of Finnvera’s activities. The report will be completed in early 2017.

Finnvera is also developing its own operating model to determine the effectiveness of its activities. 

Finnvera’s activities emphasise responsibility. We comply with international agreements that define the common principles for export credit guarantee activities. The goal is to ensure that exporters from different countries are treated equally. Before making decisions, we conduct thorough reviews of the environmental and social impacts of export projects. We also require anti-bribery undertakings from project parties. Read more in the responsibility report.

International cooperation

Export credit guarantee activities are regulated by a number of international rules and agreements aiming to curb competition based on export credit terms. Compliance with and development of these rules require close international cooperation from Finnvera.

In 2016, two cooperation bodies of export credit agencies, the Berne Union and the Prague Club, decided to merge their operations. The new Berne Union has 81 members from 73 countries. It offers its members a forum for the broad exchange of information and fosters sound principles in export credit guarantees and investment insurance. Deputy CEO Topi Vesteri of Finnvera serves as President of the Berne Union

Pekka Karkovirta will continue as Chairman of the Participants to the OECD Arrangement in 2017.

Financing of export credits in cooperation with banks

Export credit financing facilitates the arrangement of financing for foreign customers who purchase Finnish capital goods. Banks play a key role in arranging financing for export transactions: the bank selected by the buyer provides the client with a long-term export credit on OECD terms. The bank negotiates a credit agreement that meets the terms set by Finnvera and Finnish Export Credit, and manages the credit. The bank transfers the export credit to Finnish Export Credit for financing. Finnvera’s Buyer Credit Guarantee is always a prerequisite for the financing.

  • Finnvera can grant a guarantee for an export credit, and Finnish Export Credit can finance the credit.
  • The bank arranges the export credit, transfers it to Finnish Export Credit and manages the credit.
  • The export credit must comply with the OECD terms, the repayment period must be at least two years, the down payment at least 15 per cent, and instalments must generally be made every six months. The application for financing an export credit must always be submitted before the delivery contract is signed.

Export credit guarantees that came into effect in 2016 by region

Export credit guarantees that came into effect in 2016 by region
EU countries Other Europe South and Central America North America Asia Middle East and North Africa Sub-Saharan Africa
347.5 332.5 454.9 7.1 298.4 24.7 8.8


Export credit guarantees that came into effect in 2016 by sector

Export credit guarantees that came into effect in 2016 by sector
Telecommunications Forest industry Power generation Shipping companies Mining and metals Others


484.6 290.4 54.5 28.7 187.8


The biggest country exposures on 31 Dec 2016

The biggest country exposures on 31 Dec 2016
  United States Germany Brazil Russia Spain Uruguay Saudi-Arabia India Turkey Kuwait Italy Indonesia Chile Estonia
Commitments 3312.3 2287.1 1538.4 1246.7 1231.6 647.4 550.6 469.7 415.7 196.6 358.5 265.8 235.0 219.3
Offers 2280.0 16.6 1.3 5.1 0.0 0.0 0.0 0.0 0.0 180.2 0.8 0.0 0.0 0.8


Finnvera plc gives up its venture capital investments

In accordance with the policy decision made by Minister of Economic Affairs Jyri Häkämies in autumn 2012, Finnvera gave up most of its venture capital investment activities during the financial period. Finnvera implemented this by selling 80 per cent of its holding in Seed Fund Vera Ltd to the Finnish company Innovestor Ltd. Before the transaction, the investments made by using ERDF assets were placed into a separate fund called ERDF-Seed Fund Ltd. So far, Finnvera continues to manage ERDF-Seed Fund Ltd through its subsidiary Veraventure Ltd.

Finnvera has implemented the Ministry’s policy by selling a total of 17 holdings in early-stage funds and regional funds within the past three years. Finnvera still has minority holdings in a total of 3 funds. The fund holdings have been sold to private investors and to Tekes Venture Capital Ltd.


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