Dubai: More than Dh1 billion worth of finance support has been provided by the alliance between DP World Trade Finance and Etihad Credit Insurance in the 12 months since the deal was struck.
A sizeable portion of these originated from local SMEs, which have 'faced longstanding challenges in accessing trade finance solutions for global trade opportunities'. The DP World-ECI combo provided finance cover for industries like agri-commodities, chemicals, manufacturing, and construction material.
ECI can provide trade credit insurance to financial institutions, and thus allowing them to extend trade finance to individual businesses engaged in international trade. ECI’s credit insurance enables financial institutions to offer working capital solutions.
Dubai's ports and free zones operator, DP World, had launched its standalone trade finance services in 2021 after it found gaps in the local marketplace for such suppotr. It 'connects businesses with financial institutions and directly provides trade finance facilities on its own balance-sheet'.
'Elevate trade ecosystem'
“DP World's vision is a future where the flow of trade transcends boundaries, unlocking unprecedented opportunities and fostering prosperity for nations and businesses alike,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World.
“By seamlessly integrating physical infrastructure, fostering meaningful relationships, harnessing cutting-edge technology, and pioneering innovative finance solutions, we aim to elevate the global trade ecosystem.”
Since its July 2021 launch, DP World Trade Finance has partnered 25 financial institutions and generated over $800 million in credit limit submissions. "The registration process takes less than 5 minutes," it said in a statement. Over 58,000 global clients have already signed up for affordable access to trade finance on the platform.
DP World Trade Finance (DP World Financial Services ltd.) obtained its lending license in June 2022. It provides credit via short-term working capital solutions like invoice factoring, invoice discounting, reverse factoring and trade payables financing.
This 'bundling' offers businesses an 'economical solution that’s tailored to their business model, as well as providing necessary transparency and visibility on the underlying cargo, providing comfort to credit insurers like ECI'.
Working capital needs
"DP World Trade Finance plans to participate in risk with existing lenders on the platform to ensure working capital requirements of clients are adequately met," the statement added.
The platform is operated by DP World Financial Services, which arranges and provides credit for clients who are based in the UAE. (DP World Services Limited arranges credit for clients outside the UAE.)
