Romanian exporters should start looking towards emerging markets, where there is less competition and higher profits, believes Carmen Radu, the chairperson of Eximbank.
"We're trying to persuade our customers to bet on emerging markets or other market niches, because one cannot compete with the experience and technology developed states have built up," Carmen Radu told ZF in an interview. Eximbank is a state-owned bank and specialises in providing financing, guarantees and insurance to support export activities.
Most Romanian exports are currently directed to commonwealth markets, where profit margins are extremely narrow due to strong competition. Moreover, the RON growth against the euro significantly reduces any exporters' profits. In this context, Eximbank's insurance and guarantee products are viewed as expensive, explained Radu.
In recent years, many exporters have restrained their activities and have even turned to the domestic market, as RON growth has eroded their competitiveness on foreign markets. However, on emerging markets, where profit margins are much higher, but so are risks, the need to insure exports are perceived differently, added the Eximbank chairperson.
Beginning last year, Eximbank signed partnerships with commercial banks, a deal, which has allowed it to offer guarantees for loans contracted by export companies and provide insurance for any operational risks. Exporters can receive (with state guarantees) loans in order to finance their exports on markets that have higher risks.
The most popular product in Eximbank's portfolio continues to be the interest rate offset for contracted loans. In 2005, the bank was forced to restructure its product portfolio as most of the products were subject to regulations on state aid. At present, Eximbank can only offer offset interest rates for loans contracted by SMEs in RO
