The UK government's Export Credit Guarantee Department (ECGD) has finally launched its letter of credit (L/C) guarantee scheme.

Britain's Department for Business began considering using a multi-billion pound working capital guarantee fund to make L/Cs more available in April (DC World News, 23 April 2009).

Guarantees

The scheme aims to improve access to short-term export finance for UK exporters.

Under the scheme, EGCD will provide guarantees to five British banks of up to 90 per cent of the value of confirmed L/Cs issued by 282 overseas banks in 36 countries.

Participants

The UK banks participating in the scheme are Barclays, RBS, HSBC, Lloyds TSB and Standard Chartered.

They are expected to start making funds available supported by the scheme in the next few weeks. The programme is scheduled to finish on 31 March 2011.

Emerging markets

The guarantee programme is designed specifically to help UK businesses finance exports to emerging markets.

The programme will not guarantee L/Cs in markets such as the US, the EU, Australia, Canada, Iceland, Japan, New Zealand, Norway and Switzerland.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.