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BACK             Issue No. 4/2003
 Credit & Info Alliance Meeting in New York

 Domestic Credit Insurance Gaining Momentum

 Export Financing & Guarantee Fourth Workshop of Arab Gulf Cooperation held in Kuwait

 Prague Club Meeting held in Vilnius, Lithuania

 Total Credit Limits Issued by ECGA to Exporters increasing

 Non-Oil Exports

 Country Profile of Buyers of Omani Insured Exports

 Questions & Answers

 Hint to Exporter

 The Importance of Handling Claims & Recoveries

 Congratulatory Message

 Past News

 
Credit & Info Alliance Meeting in New York
The annual meeting of the Credit and Info Alliance which was recently held in New York under the auspices of COFACE ratified and approved the merger between Credit Alliance and Info Alliance into Credit Alliance Network – which is a world wide network of credit insurance, information and credit management partners. Mr. Nasir bin Issa Al-Ismaily, the General Manager of the Export Credit Guarantee Agency (ECGA) was re-elected for another term as the Regional Coordinator and Chairman for Africa-Middle East Group in the Alliance and renominated as representative of the Group to the General Steering Committee(GSC) of the Credit Alliances which include other Regional Group from Asia, Western Europe, Eastern & Central Europe and Americas. Apart from ECGA of the Sultanate of Oman, the Regional Group for Africa-Middle East consists of national ECAs from Egypt, Iran, Jordan, Zimbabwe, South Africa, Algeria, Tunisia, Morocco as well as Saudi Export Program and Multilateral ECAs that is the Inter-Arab Investment Guarantee Corporation (IAIGC) as well as Islamic Corporation of Investment and Export Credit (ICIEC).

   

 
Domestic Credit Insurance Gaining Momentum
Domestic Credit Insurance Service introduced by the Export Credit Guarantee Agency (S.A.O.C) since July 2003 has gained momentum with a number of key Omani exporters availing the facility. The facility provides additional protection to the credit insured exporters against the risk of protracted default and insolvency of domestic buyers as well as ease the exporters cash flow constraints and liquidity problems. In order to avail domestic credit insurance, the suppliers of Omani produced products should also insure their exports by taking the Export Credit Policy of the Agency. Domestic Credit Policy will be very useful for the Omani suppliers as it is considered an extension of the same service as export credit insurance because the benefits which 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 obtaining needed facilities by the local suppliers.

 
Export Financing & Guarantee Fourth Workshop of Arab Gulf Cooperation held in Kuwait
The Fourth Workshop for Development and Guarantee of the Industrial Export within the GCC Countries was held on 14th October 2003 organized by the Gulf Secretariat General and hosted by the Public Authority for Industry of the State of Kuwait. ECGA was represented by its Underwriting Officer - Mr. Ahmed Khalfan Al Balouchi. It is worth mentioning that this workshop was continuation for the success achieved through the previous workshops in (Abu Dhabi - June 1995, Jeddah – October 1997, Manama – May 2000).

 
Prague Club Meeting held in Vilnius, Luthuania
The Prague Club held its second meeting of the year 2003 in Vilnius, Lithuania hosted by the Lithuania Export Credit Agency (LEII) from October 13th to 15th, 2003. The General Manager of ECGA Mr. Nasir bin Issa Al-Ismaily participated in its meetings and workshops. ECGA became the first ECA from an Arab country to be a member of the Prague Club in the year 2000. The Prague Club which operates under the auspices of the Berne Union – that is the International Union of Credit & Investment Insurers consists of a number of ECAs from the emerging markets including Central and Eastern Europe, Africa, Middle-East and Asia.

 
Total Credit Limits Issued by ECGA to Exporters Increasing
Total credit limits issued by ECGA till end of six months of 2003 was RO.150.2 million to 89 countries world-wide compared to RO.141 million to 87 countries till end of corresponding period of 2002. Of the total credit limits issued, 75.3% were under letters of credit and 24.7% under open account. GCC countries constitute 57.4% of the total credit limits issued by the Agency.

 
Non-Oil Exports
The total Omani non-oil exports for the first five months of 2003 as per the latest statistics were RO. 112.1 million compared to RO.101.1 million for corresponding period of 2002 or an increases of 10.8%. Re-exports were RO.237.4 million for the five months period.
COUNTRY PROFILE OF BUYERS OF OMANI INSURED EXPORTS STATE OF  
KUWAIT

The State of Kuwait lies in the north-eastern tip of the Arabian Peninsula, on the shore of the Gulf. It covers an area of 17820 square kilometers and include a number of small off-shore islands. Kuwait is largely urban The population of Kuwait as per the latest estimate is 1,811,000 million inhabitants. The capital is Kuwait City. Export Credit Guarantee Agency has insured Omani exports to various products to Kuwait including detergents, biscuits, furnitures, dairy products, etc. The total credit limits issued by the Agency to Kuwait amounted to RO.9.5 million to 172 buyers. Of the total credit limits issued by the Agency to Kuwait, RO.2.4 million is under open account and RO.7.1 million under letters of credit. It represents 6.2% of the total credit limits issued by the Agency. Total business to date declared by policyholders to Kuwait were RO.25.7 million since ECGA’s inception. ECGA has paid two claims to insured Omani exporters to Kuwait. During the year 2002, total Omani exports to Kuwait were RO.10.1 million while imports were RO.10.8 million As per the latest publication of International Trade Finance Magazine (May 2003, issue No.427) in its survey highlights in Kuwait its states as follows :-

“Slightly more then half of all shipments are on open account the rest are covered with L/Cs. Payments are deposited locally promptly, usually within a week. Banks execute exchange transfers two months later”.

 
Questions and Answers


Q- How does the Export Credit Guarantee Agency meet the needs of exporters?
A- The Agency meets the needs of exporters by providing a range of facilities which include the following services:-

 Export Credit Insurance which provides cover to Omani exporters against commercial and non-commercial risks. These include buyer’s insolvency/ bankruptcy, buyer’s failure to pay, buyer refusing delivery of goods, foreign exchange transfer delay, import bans or cancellation of import licence, payment moratorium, war, civil disorder, natural disasters.

 Domestic credit insurance services to credit insured exporters so as to cover also local sales apart from exports thus mitigating commercial risks of default and bankruptcy of the local buyers.

 Post-shipment financing of exports through bills discounting with the commercial banks at concessional interest rates.

 Pre-shipment financing facilities to exporters though commercial banks against guarantees issued by ECGA for working capital requirements so as to meet and enhance the opportunity for their export sales.

 Assists and guides the exporters in recovering old outstandings and bad debts.

Q-What are the direct tangible benefits for exporters for availing ECGA's services?
A-
The existence of such beneficial services extended by ECGA to its clients provide excellent opportunities to utilize them effectively considering direct tangible benefits to them whether in terms of risk minimization through credit insurance or improving liquidity through bills discounting under post-shipment financing or availing working capital financing under pre-shipment export credit guarantee scheme.

 
Hint to Exporter
“You can increase the competitiveness of your deals by selling on credit terms, giving your buyers more time to pay. The problem is, when you sell on credit, you increase the risks that you will not be paid. That is where ECGA comes in. It helps Omani exporters to compete more effectively in international markets by reducing financial or commercial risks as well as political/country risks. ”


 
CONGRATULATORY MESSAGE
ECGA takes this opportunity to congratulate our two credit insured Omani exporters for being awarded with the Omani Awards for Excellence 2002.

“Small & Medium Sized Enterprises (SME)” Award

Al KHOUDH STEEL FURNITURE CO.

Exporter for the Year Award

AL KHALEEJ POLYPROPYLENE PRODUCTS CO. SAOG

The Omani exporters have long recognized and appreciated that one of the major keys to success is to insure with ECGA for safe export business. The Agency provides confidence, encouragement and incentive in support of its services to exporters for more than ten years.


ECGA is here to help you minimize your risks

BUYER’S RISK
COUNTRY RISK
   buyer’s insolvency/bankruptcy

   buyer’s failure to pay

   buyer refusing delivery of goods


   foreign exchange transfer delay

   import bans or cancellation of import licence

   payment moratorium

   war, civil disorder, natural disasters



Other benefits of service provided to credit insured exporters include domestic credit insurance, post shipment financing through bills discounting by commercial banks as well as issuance of guarantees to commercial banks for pre-shipment financing needs of the exporters.

 
Past News

Issue 1/2001, Issue 2/2001, Issue 3/2001, Issue 4/2001, Issue 1/2002, Issue 2/2002, Issue 3/2002, Issue 4/2002
, Issue 1/2003
, Issue 2/2003, Issue 3/2003

   
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