Give us credit
21 November 2008Increasing curbs on credit insurance are making business even more difficult than it was already and there's a growing feeling in the trade that something needs to be done about it, writes Mike Jeffree
This morning on the Radio 4 Today programme, British Banking Association chief executive Angela Knight took issue with the view that the finance sector was not helping business as much as it could. She denied that the banks had the balance wrong between restoring their own capital bases and relaxing the constraints on extending credit to companies.
Yet this week in TTJ we hear from Nigel Williams, director of Premier Forest Products and chairman of The Timber Trade Federation National Panel Products Division (NPPD), saying that getting credit insurance was still like pulling teeth. In fact, speaking at the NPPD annual dinner in London, he maintained that the credit insurance sector generally had decided it had ‘carte blanche’ to rate the whole of the wood panels industry as high risk because of its perceived dependance on the construction sector. The ‘ripple effect’ across the industry, he said, was potentially very damaging.
And now, via the TTF chief executive John White, the NPPD complaint has been taken further, to the Construction Products Association and the CBI. The hope is that pressure will be brought to bear on government and from it to the finance sector, which it is currently, of course, bailing out to the tune of many billions of pounds.
At TTJ now we’re trying to build up a picture of the availability of credit to the timber sector across the country. So what’s your experience? Do you agree with the NPPD that the credit insurance sector, rather than dealing with each applicant case by case, based on their track record and financial merit, seems to have written off the entire industry as high risk and racked up the premiums or even closed the counter to new business? Or have you got evidence that confirms Ms Knight’s contention, that the finance sector is doing it’s best to help business and ease credit restrictions? Let us know.
