Israeli exporters offered NIS 1b in guarantees

The program is based on the package deal reached last summer between employers, labor organizations and the government
 
In an effort to boost exports, the Finance Ministry announced last Wednesday that the Government would provide NIS 1b. in state guarantees through the country's commercial  banking system to encourage export deals by easing credit and minimizing commercialrisks.
 
The program includes the provision of guarantees for tenders and will remain in effect until the end of 2010. The program is based on the package deal reached last summer between employers, labor organizations and the government, which committed the government to funding up to NIS 1 billion in bank guarantee risk to exporters.
 
These guarantees, according the a statement issued by the Ministry, will not be subject to a detailed approval process by the Finance Ministry, as the banks themselves will take on part of the state's risk.
 
This will make the procedure more efficient and reduce the bureaucratic snarl typically involved in the approval process.
 
Finance Minister Yuval Steinitz said that this support of the exporting industry, one of the principal economic growth engines, will enable the economy to take advantage of its relative edge while the rest of the world struggles to emerge from the economic crisis.
 
Accountant-General Shuki Oren noted that "The guarantees will enable Israeli exporters to take part and bid on new tenders overseas, compete with foreign companies and sign new export contracts."
 
Bank Leumi signed up for the program last week and will be the first bank to use the state guarantees for its export customers.
 
Other banks interested in participating in the program will be able to join until the end of January. The Finance Ministry added that exporters have not been able to get the necessary guarantees demanded by foreign customers as banks narrowed their credit frameworks, which led tothe cancellation of some export deals.