In September 2003, the Export Credit Guarantee Agency of Oman introduced Domestic Credit Insurance Scheme, which is being availed by an increasing number of Omani exporters. This provides additional protection to the credit insured exporters against the risk of protracted default and insolvency of domestic buyers and ease exporters’ cash flow constraints and liquidity problems. In order to avail domestic credit insurance, the suppliers of Omani products should also insure their exports by taking the Export Credit Policy of the Agency.
Domestic Credit Policy is very useful for the Omani suppliers as it is considered an extension of the same service as export credit insurance. The benefits that the exporters derive will apply for domestic sales as it will also provide protection against the risks of non-payment from domestic buyers against goods supplied on credit. Furthermore, this would help the exporters in their liquidity and debt management as well as mobilize resources in their export efforts. The domestic credit insured bills can also be discounted by the commercial banks by assigning the benefits under the Domestic Credit Policy thus helping local suppliers access needed facilities.