Finnvera’s role and the impact of its operations
Finnvera promotes Finnish enterprise
By providing financing services, Finnvera’s role is to promote the business of small and medium-sized enterprises, the internationalisation and exports of enterprises, and the implementation of the government’s regional policy, which Finnvera does by providing financing services. We carry out the tasks that our owner, the State of Finland, has assigned to us as a provider of financing for enterprises. Our clients range from start-ups and seekers of profitable growth to enterprises trying to gain a foothold on the international market and those already operating there. Our objective is that Finnish companies get innovative ideas, grow and gain markets.
The Ministry of Employment and the Economy supervises and monitors Finnvera’s operations and sets annual goals for the company. When determining these goals, attention is paid to the Finnish Government Programme, the Ministry’s corporate strategy, the policy objectives concerning the Ministry’s branch of administration, and the goals of EU programmes.
In 2014, Finnvera’s goals emphasised, in particular, the financing of starting, growing and internationalising enterprises.
We understand the risks inherent in business but we keep a close eye on opportunities.
The attainment of Finnvera’s goals is measured, for instance, by the number of new enterprises created by means of the financing granted and the number of jobs in which Finnvera has played a role. Other indicators monitored include the percentage of SME financing granted to growth enterprises, the ratio between exports covered by export credit guarantees and Finland’s total exports, and the amount of financing allocated to areas assisted on regional policy grounds.
Support for the various stages on the enterprise path
Every year, Finnvera participates in the financing of about 3,500 start-up enterprises. This corresponds to an average of ten per cent per of companies annually established in Finland. In an uncertain economic climate, it may be difficult for enterprises to obtain financing from the private market. Finnvera can take on more risks than private financial institutions, thereby promoting new enterprise. Without Finnvera's contribution to the financing of start-up enterprises, the consequence might be that fewer enterprises would be established or their growth and development would be considerably slower.
In venture capital investments, the aim is to create financing solutions that help early-stage enterprises, within a period of two to five years, to develop into companies that also attract private investors and financiers. In the medium term, the aim is to grow start-ups into medium-sized enterprises that contribute to the Finnish economy as employers and facilitators of economic growth.
Finnvera helps enterprises seeking growth through internationalisation to expand their business by providing financing options for international trade and supporting investments. In the financing of internationalising enterprises, Finnvera can also assume higher risks than normally. In 2014, the amount of financing granted to growth enterprises accounted for 44 per cent of Finnvera’s SME financing.
Finnvera also provides financing for Finnish SMEs operating on the domestic market in change situations that increase their competitiveness, such as changes of ownership. Although these companies do not seek international growth, they play an important role in the Finnish economy, for instance, as employers. Finnvera strives to alleviate the negative effects of regional restructuring and to keep regions viable.
In cooperation with other actors, Finnvera participates in the planning and implementation of measures in areas of abrupt structural change when, for instance, a major employer winds up its operations. In 2014, there were 8 areas of abrupt structural change in Finland. Finnvera’s financing for enterprises in these areas totalled EUR 69 million.
Export credit guarantees
To be eligible for export credit guarantees, exports must meet the requirement of Finnish interest. This means that the export project is viewed from the perspective of the Finnish economy. The arrangement of financing may be a decisive factor in the conclusion of an export transaction. Indirectly, export financing is very important for the Finnish economy and thereby for Finns’ well-being.
Exports covered by export credit guarantees: Share of Finland's total exports, %
|Share of Finland's total exports||5,80||4,50||4,50||3,80||3,6|
Foreign risk-taking: Exports covered by guarantees by region, 31 Dec, MEUR
|Middle and Eastern Europa||40,60||47,80||19||9||2,200|
|Middle East and North Africa||378,90||349,80||473,70||405,70||262|
Impact on employment
|Number of jobs||8994||10159||8660||8663||8105|