Success Factors of Export Financing under the Buyer's Credit Scheme

Buyer's credit is a very useful mode of exporting in international construction especially in relation to extensive infrastructure projects. Large projects usually require substantial amounts of liquidity provided by banks. Importers seldom have enough own resources to cover the entire capital expenditures, while only few exporters have the capacity to provide credits to their buyers. The concept usually requires the participation of financial institutions on the exporter's as well as the importer's side. The execution of projects under this advanced scheme requires the possession of export know-how and complex knowledge of the business environment. Many contractors still fail in their exporting attempts at the very beginning, due to the shortage of experience in this matter. Based on the literature review, foregoing research and exploratory interviews with trade finance specialists, the list of seven factors contributing to a successful project execution under the buyer's credit scheme was compiled. This research analyses and compares the perceptions of Czech and German export finance practitioners. Research findings were derived from their empirical evaluation collected through structured questionnaires. For the purposes of this research, quantitative methodology was adopted. The main objective of this study is to prioritize these factors, increase their understanding and provide a route map to exporters considering the application of this advanced financing scheme. The authors argue that there are only minor differences between the perceptions of Czech and German exporters.