The products and services provided by Credit Oman contribute to facilitating trade for companies registered in Oman, both on a domestic and international level. The trade credit insurance products allow for businesses to trade safely and protect their cash flow, through the various tools provided under each policy.
Products
POLICIES FOR CORPORATE CLIENTS
Trade credit insurance policy
For companies registered in Oman, seeking to trade with local buyers or export their products or services internationally, the short-term trade credit receivables policy safeguards sales transactions and protects cash flow.
Multi-buyer trade credit insurance policy
The Multi-buyer Policy by Credit Oman, offers full buyer portfolio coverage. This policy is ideal for companies selling to a large number of buyers, locally in Oman or exporting to international markets.
SME Policy
The SME Policy by Credit Oman, is tailored for small and medium sized enterprises, both selling goods and services in Oman, as well as companies selling to international markets. This policy for can be used by companies registered in Oman as SMEs and have a permit to trade.
Advance Payment insurance policy
The Advance Payment insurance policy is issued to companies that are registered in Oman. The policyholder purchases this Policy, to insure the advance payments that the policyholder is carrying out, for both local and international suppliers.
Extended short-term credit insurance policy
The extended short-term credit insurance policy insures its holders against the payment default of their corporate buyer for the sales of goods and services, payable by instalments, over a period of up to 36 months.
POLICIES CUSTOMIZED FOR BANKS
Documentary Credit Insurance Policy (DCIP)
The Documentary Credit Insurance Policy (DCIP) by Credit Oman, is a specialized policy for banks. It provides a Letter of Credit (LC) confirmation to safeguard export trade transactions. It is available for commercial banks and financial institutions. It protects them against risks or default or non-payment by the buyer, based on the LC issued by the importer’s bank.
BENEFITS OF TRADE CREDIT INSURANCE
Explore the benefits of trade credit insurance, what risks your business can be exposed to, and what is covered under the domestic and export credit insurance policies from Credit Oman.
What is Credit Insurance?
Credit Insurance supports Omani businesses to increase their sales, domestically and internationally, whilst protecting them against the risks of non-payment from buyers, due to commercial and political (non-commercial) risks. With credit insurance, Omani businesses and exporters are protected against payment risks, as well as advised on the credit worthiness of buyers in international markets. In addition, policyholders are supported and guided to collect and recover bad debts.
By insuring their domestic and export receivables with Credit Oman, policyholders gain better control on their trade receivables by keeping a tab on the buyers and credit limits approved for cover.
Why is credit insurance important?
Credit insurance is an essential and important tool for businesses in mitigating the risks associated with non-payment and defaulting buyers. It helps businesses sell safely based on credit terms and compete against other suppliers.
It also provides businesses with the confidence to sell to new buyers and markets across all covered geographies.
Additional benefits of the Export Credit Insurance Policy
Another benefit offered by the Export Credit Insurance policy is that it can be assigned to the exporters’ banker as collateral. This provides an opportunity for exporters to obtain new post shipment financing facilities or enhance existing facilities, on better or concessional terms than the banks might have not otherwise offered.
Accordingly, the Export Credit Insurance Policy minimizes the risks of non-payment for the exporter and also enables them to obtain necessary and better export financing terms.
Overall, it provides exporters with greater financial liquidity in managing their foreign receivables portfolio.
Domestic Credit Insurance
The Domestic Credit Insurance policy protects businesses against the risk of non-payments from buyers. The policy includes protection against protracted defaults and the insolvency of domestic buyers. It can also be used to ease exporters’ cash flow constraints and liquidity problems.
In simple terms, ensure you trade safely, mitigate risks and get paid for the goods and services you supply.
Why is the Domestic Credit Insurance policy important?
The Domestic Credit Policy from Credit Oman, is integral as it protects Omani suppliers from the risks of non-payment from domestic buyers against goods supplied on credit.
The policy also helps Omani businesses with their liquidity, protects their cash flow and supports with debt management and recovering bad debt.
Domestic Credit insured bills can also be discounted by commercial banks, by assigning the benefits under the Domestic Credit Policy, which helps local suppliers access needed facilities.
What is covered under the Domestic Credit Insurance policy?
Domestic credit Insurance covers the domestic commercial risks that policyholders are exposed to. This includes a buyer’s insolvency or bankruptcy and the buyer’s failure to pay.
What are the risks when exporting?
Export Credit Insurance by Credit Oman provides cover to exporters against commercial and non-commercial risks. These include buyer risks, such as a buyer’s insolvency/bankruptcy, buyer’s failure to pay and a buyer rejecting delivery of goods. In addition, the policy covers country risks, which include foreign exchange transfer delays, import bans or cancellation of import licenses, payment moratorium, war, civil disorder and natural disasters.
Credit Oman’s credit insurance products reduce the risk and maximize opportunities of exporters selling in foreign markets. Credit Oman indemnifies exporters if they have not been paid by buyers in the overseas market.
Understand the risks involved with trade
There are numerous risks that businesses are exposed to when trading domestically and internationally. These risks are even more prevalent, given the shifts that the world has experienced over the past year.
Hence, protecting the biggest asset of any company, which is its trade receivables, is our core mission. Understand the various risks that businesses can be exposed to and how they can be protected, with trade credit insurance, to ensure you are paid on time.
Risks associated with buyers
- A buyer may become insolvent or bankrupt
- Buyers may default and fail to pay for goods or services you have provided
- Buyers may refuse the delivery of goods
Country risks
- Foreign exchange issues
- Transfer delays due to banking and financial systems
- Import bans or cancellation of import licenses
- Port-related issues and disruption of customs procedures
- Payment moratorium
- War, civil disorder, natural disasters
- Pandemics