COUNTRY PROFILE OF BUYERS OF OMANI INSURED EXPORTS STATE OF
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?
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. ”
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
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.
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