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Export Credit Guarantee Agency of Oman
 
 
Export Credit Guarantee Agency S.A.O.C. (ECGA) aims to promote the growth of Omani non-oil exports by providing export credit insurance to exporters. The primary objective is to minimize the risk and maximize the opportunities of exporters in selling goods overseas. Selling goods and services in foreign markets can be both lucrative and rewarding. But it can also be risky because there is always the chance that your buyer cannot pay. ECGA export credit insurance enables you to effectively manage these risks in a number of ways. Hence this encourages and supports the expansion of export trade.

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.

The Export Credit Policy covers export sales made on credit terms of 180 days or less. The Export Credit Insurance Policy provides standard 80% - 85% protection against commercial and political risks. Coverage can start when the exporter signs the export contract or when the goods are shipped.

  What The Export Credit Policy Covers ?
The Export Credit Policy can protect you against both buyer risks and country risks :

  Buyers Risks Covered
    Insolvency of the buyer.

    Non-payment of goods accepted by the buyer six months after the date of goods have been     accepted.

    Buyer's failure or refusal to accept goods dispatched which comply with the contract.

  Country Risks Covered
   
Delays in transferring funds from buyer's country.

    Any action of the government of the foreign country which wholly, or partly, prevents     performance of the contract.

    Political events or economic, legislative or administrative measures occurring outside the     Sultanate which prevent or delay transfer of payment.

    War, civil war and the like in the buyer's country preventing performance of the contract.

    Cancellation or non-renewal of an import license or imposition of new restrictions on     exports after date of contract.

    The failure or refusal on the part of a public buyer to fulfill any of the contract terms where     ECGA has agreed that the buyer is a national government authority.

  Choice of Cover for the Exporters

The exporter can opt for either :
A Shipments Policy - This is for general consumer goods, with the credit insurance taking effect from the date of shipment or
A Contracts Policy - This is for goods of a special design or catering for a specific market, with cover commencing from the date the contract is signed.



  What does it cost to credit insure ?
Relatively little, though premiums vary, depending on the buyer, the payment terms, and the economic and political environment of the buyer's market. The schedule of the premium rates is available at ECGA to the exporters upon request.

  What Happens When Losses Occur?
The exporter is normally covered up to 80% of loss in case of buyer's default or insolvency (commercial risk) and up to 85% for the country risk (political risk). But you must also as the insured, do your best to provide relevant information as ECGA tries to minimize losses. When the buyer fails to accept or take the goods, in accordance with the contract, the exporter bears a 'first loss' of 20% and ECGA bears 80% of the balance.

  Claims
The time at which claims are paid varies according to the cause of loss, but provided a fully-documented claim is submitted promptly and is accepted, payment is normally made :-

   Immediately on proof of buyer's insolvency.
   Six to twelve months after due date of payment for protracted default on goods accepted.
   One month after resale if the original buyer had failed to take up the order.
   Six to twelve months after due date for most other causes of loss

ECGA will assist your recovery action. Payments are usually made in Omani Rials, except in special instances, and normally settled after six months of the loss having occurred, depending on the cause of the loss.

  Why Not Insure Today?
It is clear from the reasons and for the benefits mentioned that the exporter should make credit insurance an integral part of his marketing strategy. Bear in mind, too, if you are an exporter, that your competitor may have already been credit insured and for that reason can offer better credit terms than you can unless you have also hedged against the credit risk.

  Your Export Credit Policy as a Financing Tool
ECGA aims to encourage and maximize the sale of Omani produced goods. One of the most important areas is that of export financing.

While credit protection is important, we at ECGA are also aware you might need additional help to finance your exports. For this reason, The Export Credit Policy is so designed to allow you to use it as an additional form of security to your banker.

Most banks will usually look to their customers for collateral to secure the risk of non-payment of any loan or advance extended to finance an export trade credit. The Export Credit Policy protects the customer against loss due to non-payment for events outside the exporter's control. The benefit of this protection is that it can be assigned to the financing bank under a simple procedure in a Letter of Authority (L/A) and is accepted by the banks as a valuable form of additional collateral not otherwise available. In consequence the export credit insured exporter can expect to enjoy improved financial facilities and in many cases concessional interest rates.

  PRE-SHIPMENT CREDIT GUARANTEE SCHEME
Export Credit Guarantee Agency issues Pre-Shipment Credit Guarantee to commercial banks on behalf of exporters in order to assist them in obtaining pre-shipment financing facilities for the purpose of purchasing raw materials, processing / manufacturing, packing of goods to be exported. The guarantee scheme allows the banks to finance the exporters at liberal terms as the guarantees cover the non-payments of advances granted to the exporters due to the following financial risks :

    Insolvency of the exporter
    Protracted default by the exporter

  Credit Alliance Network
ECGA had joined as a full fledged partner of the prestigious Credit Alliance Network under the auspices of COFACE - the French Export Credit Insurance Agency since 1st June 1996. The Credit Alliance is an international network of several Export Credit Insurance Agencies in different countries as well as COFACE owned subsidiaries. ECGA is fully integrated through the Alliance. The Partners within the Alliance share and exchange information electronically. Other services utilized among the partners in the Alliance include underwriting, debt collection, reinsurance of international risks, etc.

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