Chancellor George Osborne and Treasury Secretary Danny Alexander announced a £5bn Export Guarantee Facility on Wednesday as part of a £50bn investment to boost the UK economy.
The £5bn facility will underwrite short-term loans to overseas buyers of UK exports and will be up and running towards the end of 2012.
This new mechanism will counter poor access to finance preventing foreign businesses purchasing UK-made goods.
Foreign banks will now have more faith in business plans requiring loans to purchase goods and services from the UK.
The two Treasury ministers said that providing targeted export support is vital if UK is to move away from an economy built on debt.
Osborne and Alexander hope that the facility will benefit sectors including aerospace, oil and gas and transport by increasing the amount of exports to countries such as China and India.
UK exports to non EU countries were up by 13.2% in the last three months, compared to the same period in 2011, which illustrates the opportunities available in growing markets such as Asia.
A recent study by the Centre for Economics and Business Research predicted that over the next five years UK exports will grow over 30% to Asia, over 40% to Latin America, and over 60% to Africa.
Mr Alexander said: “The measures we’re announcing today will help work get started on many important infrastructure projects and help our major exporters, providing lasting benefits for thousands of people and a significant boost to the economy.”
However, shadow chief secretary to the Treasury, Rachel Reeves, has commented that these plans do not go far enough.
“There is no guarantee that government-backed loans will see any infrastructure projects going ahead in the next year which wouldn’t have happened anyway,” Ms Reeves said.
