ANNOUNCEMENT 05 Dec 2012
In December 2012, the British government announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
On 5 December 2012, George Osborne, the Chancellor of Exchequer, announced that a Ł1.5bn direct lending facility is to be established. UK Export Finance (UKEF) Department will be able to lend this money to overseas buyers purchasing capital and semi-capital goods and services from British exporters. "This facility will be available for small and medium size transactions where loan funds cannot be obtained from commercial banks"(UKEF announcement).
By helping overseas companies to access funds not available for purchases from other countries this initiative acts as an indirect export subsidy facilitating exports by British companies and is giving them an advantage over foreign competitors.
The funding will be made available from 1 April 2012 until the end of 2016.
On 19 March 2014, the Chancellor announced in his 2014 budget an expansion of the initial direct lending facility ("enhanced DLF"). Hence, this measure is no longer classified as implemented.
According to a media report (cf. Sources), UKEF provides loans under the condition that at least 25% of the loan is targeted to support British jobs.