+971 4 451 4008
+971 4 451 4008

Export Credit Insurance

ECI

Export Credit Insurance (ECI) is a crucial tool that helps both exporters and importers manage risks and enhance business operations. Here’s how it benefits each party:

For Exporters

1. Risk Mitigation

  • Non-Payment Protection: ECI protects exporters against the risk of non-payment by foreign buyers due to commercial (e.g., insolvency, bankruptcy) and political (e.g., war, expropriation) events.
  • Extended Coverage: Coverage can include protection against protracted default, where buyers delay payments beyond agreed terms.

2. Enhanced Financing Options

  • Access to Financing: Banks and financial institutions are more willing to provide financing to exporters when receivables are insured, as it reduces the risk of non-repayment.
  • Improved Cash Flow: Exporters can convert receivables into cash more quickly through factoring or discounting insured invoices.

3. Competitive Advantage

  • Flexible Payment Terms: Exporters can offer more attractive credit terms to buyers, knowing they are protected against non-payment risks. This can enhance competitiveness in global markets.
  • Market Expansion: With ECI, exporters can confidently enter new and potentially riskier markets, knowing they have a safety net in place.

4. Peace of Mind

  • Focus on Growth: Exporters can concentrate on expanding their business without constantly worrying about the financial stability of their buyers.
For Importers

1. Supplier Confidence

  • Secure Relationships: Importers benefit from dealing with exporters who have ECI, as it assures suppliers are protected and thus more willing to engage in transactions.
  • Stable Supply Chain: Ensured continuity of supply as exporters are more likely to maintain shipments when their receivables are insured.

2. Access to Better Terms

  • Extended Credit Terms: Importers may receive longer payment terms, as exporters with ECI can afford to offer more favorable credit terms.

3. Reduced Upfront Costs

  • Deferred Payments: Importers can manage their cash flow better by deferring payments, allowing them to reinvest in their business while securing goods.

4. Enhanced Negotiation Power

  • Leverage in Discussions: Knowledge that their suppliers have ECI might give importers additional leverage in negotiating terms, as both parties are protected from potential financial disruptions.
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