Improving financing possibilities is essential for tackling market-entry barriers in emerging and developing economies. Competitive risk hedging can open up new markets.
4.1 Simplify financing possibilities
Access to financing is a significant hurdle for market entry in emerging and developing markets. A modern foreign trade promotion must therefore simplify the financing of international projects – through better integration of existing promotional banks (such as DEG, KfW), streamlined procedures, and targeted support for SMEs.
The financing programmes DEG ImpactConnect and TradeConnect (aimed at small-scale export financings) are key instruments for supporting international initiatives, and should be consistently innovated. Especially for small-scale projects, there is a gap in market offerings where private banks often find them unattractive. Specifically, the TradeConnect pilot project for the African continent should be rapidly expanded to other world regions upon positive evaluation. Strategic use of the pilot programme is crucial: an evidence-based analysis should systematically identify financing needs covered by existing instruments and detect supply gaps. This gap analysis can serve as the foundation for the targeted and demand-oriented development of the programme.
4.2 Offer more competitive risk hedging
Federal export credit guarantees are indispensable foreign trade promotion tools for businesses. They protect German companies from payment defaults and facilitate market entry into higher-risk destinations, particularly in times when diversification is critical.
However, international distortions arising from variations in grant criteria are a challenge for German companies. Export credit guarantees should match international standards without surpassing restrictions compared to competitors.
The federal measures package from January 2025 takes steps forward, reducing bureaucratic hurdles and enhancing flexibility in coverage options.
For projects deemed too risky with conventional financial tools, the creation of a targeted venture capital framework should be considered. Solutions implemented in the Netherlands via FMO Ventures demonstrate how to realise such initiatives practically.
Comprehensive communication and synergy with established programmes like the Import Promotion Desk are vital here, aligning efforts with German Chamber of Commerce networks globally.