What are the benefits of bills discounting to eligible credit insured exporter under the Credit Oman’s Post-shipment Financing Scheme?
The post-shipment financing allows the exporters to improve on their liquidity or cash flow position as they get necessary funding from commercial banks through bills discounting of their export receivables and at a concessional interest rate as agreed between the Export Credit Guarantee Agency and the commercial banks in the country.
What can Credit Oman do if the exporter faces difficulties in discounting export bills with the commercial banks for which the Agency has entered MOU?
Upon receipt of intimation from the exporter to this effect, Credit Oman would contact the concerned bank to ascertain the reasons for not discounting the export bills which are credit insured under the Policy and endeavor to assist the exporter. Sometimes, the banks may have some restriction in extending further credit facilities due to past due facilities with them, or with the other banks which are under litigation.
How can Banks play a greater role in the process of enhancing the services that the Agency provides to exporters?
Export Credit Guarantee Agency of Oman has signed MOUs with most commercial banks operating in Oman under the post-shipment financing program whereby credit insured exporters can discount their export bills with commercial banks against preferential interest rates, thus reducing their post-shipment financing cost. Credit Oman can also issue pre-shipment export credit guarantees whereby banks are able to provide financing at a pre-shipment stage for working capital needs of exporters. In addition, the Agency launched a new product during the first half of 2014 titled “Documentary Credit Insurance Policy” whereby the commercial banks in Oman add their confirmation on irrevocable letters of credit after obtaining the Agency’s guarantee in order to protect them against the risk of non-payment of an irrevocable letter of credit issued by the importer’s bank. Therefore, these products offered to commercial banks in the Sultanate of Oman will play a great role in the process of encouraging and promoting export insurance.
(1) You must use all reasonable and usual care and skill and take all practical measures, including any measures which may be required by us, to prevent or minimize loss and we shall not be liable for loss if you fail to take all such practicable measures to prevent or minimize loss within a reasonable time after you have learned of the occurrence of a cause of loss or of any event likely to cause loss;
(2) You must promptly notify Credit Oman in writing when you become aware of the occurrence of any cause of loss, or of any event likely to cause loss, or that the Issuing Bank is unable to pay its debts as and when they fall due or that the Issuing Bank is in financial difficulties.
(3) You must provide us with all information and documents that we may require.
The Export Credit Policy is normally recognized by the commercial banks as a valuable form of an additional security. If necessary, the exporter can assign the benefits of the Policy to his financing bank which allows Credit Oman to pay claims directly to the Bank. Consequently, the credit insured exporter can enjoy improved financial facilities through relatively lower interest rates.