The Prospects of Supported Export Financing in the Czech Republic

Succeeding in business internationally involves much more than transplanting a business model or shipping a product overseas. Risk management, regulatory compliance, and especially financing are the key elements in achieving success in the international marketplace. The need of export financing results from the higher financial requirements of the foreign trade, in comparison to the domestic trade. The reasons of the higher costs of exports include the geographical distance from the point of production to the point of consumption, the chronological mismatch between the physical transfer of goods and/or services and the payment for them, and finally the higher risk of export operations. From the point of view of the global international trade, the Czech Republic is a small opened economy, with its foreign trade dependent mostly on the countries of the European Union. Worldwide, and in the Czech Republic as well, the governments support export activities of local producers, and they oiler loan programs specifically designed to help the producers to develop or expand their export activities. The support of export credit financing is generally based on the Arrangement on Guidelines for Officially Supported Export Credits (commonly known as the Arrangement). The aim of this article is to analyze the current status of export financing in the Czech Republic, the possibilities of official financial support, and to detect potentials for the Czech companies involved in the foreign trade. The article analyses the performance and structure of Czech exports, describes the current status of the state export financing support, and traces the prospects of export financing in the Czech Republic. Findings of this article indicated substantial growth potential of export financing, especially export financing with the state support and accompanying export credit insurance.