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BACK             Issue No. 3/2001
 Level of Export Credit Insurance business of ECGA increasing

 Claims paid by ECGA revealed

 Sadolin Paints (Oman) Ltd availed Trating services

 Meeting between participating ECAs and the Secretary General of the Berne Union held in Zagreb, Croatia

 ECGA's website revamped

 Non-Oil Omani Exports increased

 Questions and Answers

 Tips to Exporters

 The Story of ECGA - 10th Anniversary


 
Level of Export Credit Insurance business of ECGA increasing
It was revealed in the Annual Report for the year 2000 of the Export Credit Guarantee Agency that the total credit limits as of the end of the year 2000 were RO.117.1 million compared to RO.98.7 million in 1999 or a growth rate of 19%. The Report indicated that in the year 2000, ECGA covered exports to 2310 buyers to 80 different countries compared to 2077 buyers and 76 countries in 1999. The Agency is marking its tenth anniversary since inception of its export credit insurance operations in 1991. It has supported by providing credit insurance protection to a number of export sectors including consumer products, construction related products, garments, fisheries, agriculture as well as other industrial products.

 
Claims paid by ECGA revealed
The Agency has paid a total of 19 claims worth RO.296032 since its inception of its activities in 1991 till end of 2000. Its claims ratio is 26.7% compared to its total premium income. The number of policyholders that were paid claims were 15 and to 8 different countries world-wide. The percentage of claims paid to GCC countries constituted 87.5% of the total.

 
Sadolin Paints (Oman) Ltd availed @ rating services
Sadolin Paints (Oman) Ltd is one of the first exporters in the country to avail trating label which provides indispensable global certification of the security offered to its commercial and financial partners. M/s Sadolin Paints (Oman) Ltd has been assigned with the maximum rating of @@@L which denotes the excellent trating quality label granted to reflect company’s creditworthiness and business reliability. trating product was launched in the Omani Market in March 2001 by Coface Group in coordination with ECGA. The company is involved in the production and exports of paints. It is also one of the first exporters to avail the export credit insurance of ECGA since 1991. The exporter has also managed the Export Credit Policy effectively and has benefited immensely for being paid a number of claims by the Agency for its insured exports to foreign buyers. The company is also benefiting from export bills discounting with the commercial banks.

 
Meeting between participating ECAs and the Secretary General of the Berne Union held in Zagreb, Croatia
The bi-annual meeting of the participating ECAs and the Secretary-General of the International Union of Credit & Investment Insurers, the Berne Union which was held in Zagreb, Croatia from 13th to 16th May 2001 hosted by Croatian Bank of Reconstruction and Development (HBOR) approved the name of the gathering as the “Prague Club” in recognition that the first meeting was held in Czech Republic. The meeting also approved the Rules and Regulations of the Club. Export Credit Guarantee Agency of the Sultanate of Oman participated in its first two meetings in Tashkent and Vienna as an Observer. Considering that the Agency is actively involved in the export credit insurance services, its status has now been transformed as a full member of the Club.

The participating ECAs are required to observe the Berne Union Understanding and Agreements and report any deviations from them. The main objective of the Club is to support members and observers in developing their export credit and investment schemes. Among various purposes of the Club is to work for international acceptance of sound principles of export credit insurance, provide exchange of information, assistance, expertise and advice in relation to both commercial and political risks involved in export credit insurance and a range of other associated matters including foreign investment insurance, etc.

 
ECGA's website revamped
ECGA has launched its revamped website. The site is highly informative to the exporters and others. The Agency has endeavored to make this site dynamic by constantly adding new features, and information useful to the customers. The Agency constantly monitors feedback from the customers and keeps updating the site periodically.

 
Non-Oil Omani exports increased

As per Monthly Statistical Bulletin issued by the Ministry of National Economy, total Omani Non-Oil exports for 1st quarter of the year 2001, were RO.71.9 million compared to RO.65.8 million for corresponding quarter of the year 2000. This represents a growth rate of almost 9.3%.
Questions and Answers 
Q- What is Export Credit Insurance?
A- Export Credit Insurance is a financial tool that reduces the risk of an unexpected credit loss. It is on insurance policy that runs for 12 months, and covers losses on goods exported during the policy period. Thus Export Credit Insurance offers cover against non-payment by an exporter's foreign buyers for goods or services supplied to them.


Q- How can a policyholder assists ECGA in processing credit limit application more quickly?
A- First, the amount of your credit limit application should be realistic and close to your probable requirements in the foreseeable future. Second, the policyholder should provide ECGA with full and correct details of the buyer 's trading style, address and the name and address of his banker. Third, it is important that the policyholder gives the full and actual details of previous trading experience with the buyer, if any. Fourth, if the policyholder has up-to date credit information on the buyer he can attach such reports together with any other additional information to the application.


Q- When and how should I inform the Agency when the buyer delays payment?
A- Immediately any payment becomes two months outstanding, or when you notice the buyer has encountered financial problems, or when you hear an adverse information about the buyer. You can inform ECGA by phone or by any other means which are convenient to you such as E-mail and fax.


Q- Are cancelled credit limits applicable to outstanding debt?
A- Cancelled credit limits continue to apply to outstanding debt in respect of shipments made prior to date of cancellation, but not for future shipments.


Q- To remain fully insured is it necessary for me to limit the value of my contract to the precise value of the credit limit agreed by the Agency?
A- Not at all. On a large contract, you may for example be able to spread your dispatches so that the amount outstanding for goods exported is, at any one time, within the approved limit. This means you can undertake contracts of a value greater than that given of your credit limit, since it is revolving.


Q- What is @ rating Quality Label?
A- Coface – the French Export Credit Insurance Corporation has established the @ rating quality label which evaluates the ability of the companies to honor their commercial commitments. It enables you to certify the security offered by your company to your commercial and financial partners. Coface Group in association with the Export Credit Guarantee Agency launched @ rating in Oman in March 21, 2001.


Q- What are some of the advantages of @ rating?
A- Among the advantages of @ rating is that it allows to make your customers and suppliers aware of your company’s absolute reliability and credibility as well as inspire confidence of your trading partners on business transactions worldwide. Thus @ rating provides your company with an indispensable global certification.


Q- How can I avail @ rating?
A- You can avail @ rating by contacting ECGA for necessary information and application form or through its website at http://www.ecgaoman.com which is linked with www.cofacerating.com.


Q-What are the risks that are not covered by ECGA ?
A- ECGA will not cover disputes between the buyer and the exporter regarding the supply e.g. quantity, packing, etc, unless the policyholder gets a court ruling in his favor, causes inherent in the nature of goods, default of any agent of the exporter or of the collecting bank, fluctuation in the exchange rate.

 
Tips to Exporters

 Credit insurance allows the exporters ability to pledge export receivables and insured purchase orders as collateral for working capital financing with the commercial banks.

 By insuring your export business with ECGA, the policy provides necessary protection from protracted default, non-acceptance of the goods as well as insolvency of the buyer as well as non-commercial risks.

 Credit insurance allows you as an exporter to secure a more competitive market position by offering aggressive open credit terms that can enhance the ability to meet a buyer’s need. This is because as competition in the marketplace heats up, more and more companies demand open credit. By utilizing credit insurance to hedge the risk of loss, exporters can extend open credit that will permit foreign buyers to more easily purchase the quantity of product that they truly desire. Hence credit insurance is very essential to exporters and others in extending liberal terms of payment to buyers such as open account.
   
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