Export Credit

Export Credit is a preferential loan provided by the government of an exporting country to support its exports, extended through banks or specialized agencies to domestic exporters or foreign importers (or their banks). Its core purpose is to enhance export competitiveness, typically with interest rates below market levels, and the interest rate differential is subsidized by the government. Usage scenarios include exports of capital goods such as large equipment and complete plant projects, with terms mostly ranging from 1 to 10 years. Note: Export Credit is often paired with Export Credit Insurance, which covers political and commercial risks; it differs from ordinary commercial loans in its policy-oriented and preferential nature; Buyer's Credit and Supplier's Credit are specific forms. Practitioners should pay attention to the OECD Arrangement on Officially Supported Export Credits regarding interest rate and term constraints to avoid being deemed prohibited subsidies. Additionally, Export Credit is not directly equivalent to export tax rebates or export subsidies; loan conditions, repayment methods, and guarantee measures must be clearly specified in contracts.