Abu Dhabi: Etihad Credit Insurance (ECI), which has just begun operations is aiming to boost UAE exports and diversification of the economy by providing credit insurance to exporters and investors.
The federal government owned ECI, capitalised at Dh1 billion will also have the support of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), which is part of Jeddah-based Islamic Development Bank group.
ECI and ICIEC on Wednesday signed a Memorandum of Understanding to boost export trade through the promotion of Sharia-compliant export credit and investment insurance instruments.
The aim of ECI is to provide insurance and support exports and investors to mitigate risks — both political and commercial, said Massimo Falcioni, chief executive officer of the newly-formed entity.
“We will act as an enabler for exporters to be protected from political or commercial risks and also get easy access for trade finance from banks as we give guarantees to get financing,” he said, speaking to reporters in Abu Dhabi on Wednesday.
ICIEC will provide reinsurance capability to ECI as well as technical assistance, credit information services to promote the UAE’s non-oil exports.
The UAE is primarily an export and re-export market with 75 per cent of exports going to Asia and emerging markets.
ECI will also support SMEs, which are the backbone of the diversification plan of the UAE’s economy.
Lending to SMEs accounts for only two per cent of the total lending of the GCC (Gulf Cooperation Council) and four per cent of all lending in the UAE, Falcioni added.
“Today credit insurance is very underpenetrated. So only a few companies are covered; only 600 companies are insured under trade credit insurance programme. With ECI we will also go to cover those areas of the market which are not the focus of the private industry.”
He also added that ECI as a government institution does not compete with other private insurance companies, but adds capacity and offers specific solutions for exporters and cover areas that are not served.