Expanding Exports: Relevance of Export Finance

Abstract

This study examines the status of the export finance market in Sri Lanka and identifies the key limitations that prevent export finance from playing a proactive role in promoting exports. It reveals that the access, availability and diversity of export finance in Sri Lanka is limited and the few export finance solutions that are available remain weak and under-utilised. Export finance solutions reduce the risks faced by exporters such as country and commercial risks, encourage diversification into developing country markets, help SMEs manage short term cash flow issues, and allow exporters to attract buyers by offering better payment terms. By doing so, export finance can help promote exports.