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Etihad Credit Insurance has also been working closely with banks to bolster the cashflow situation at client entities. Image Credit: Bloomberg

Dubai: Etihad Credit Insurance will be issuing another 2,000 ‘revolving credit guarantees’ to UAE-based exporters this year, as part of its bid to revive business activity after the COVID-19 induced damage.

The UAE’s trade finance company had provided a similar number of guarantees last year, moving in quickly to help out local export firms who found their cashflows after orders got cancelled or delayed and supplies were disrupted.

The guarantees also serve another purpose – ensure that jobs are not lost at businesses that get the credit lifeline.

“We supported sectors we see as very important - like renewable energy - because they can generate employment,” said Massimo Falcioni, CEO. “We focus on those sectors where employment has to be safeguarded and we do this by protecting the cashflow of companies.”

Under a revolving credit, the exporter can tap funds available up to a set limit while repaying a portion of the  balance as installments. 

ECI supports the export and re-export of UAE-made goods through a range of export credit, financing and investment insurance products.

Feed into demand

Falcioni said that traders and exporters have also shown interest in supply financing solutions. This gives businesses access funds for their raw material purchases.

A majority of the companies signing up for ECI’s services belonged to the food, petrochemicals or automotive industry. Some clients had become even more competitive during the pandemic. “They accessed new markets with competitive terms because they could enter there with open credit terms rather than with cash or a letter of credit,” said Falconi.

Partner banks

ECI is also working closely with UAE’s banks to make sure that SMEs as well as bigger enterprises get access to the liquidity guaranteed by the UAE central bank.

After the pandemic erupted, the regulator had announced a string of relief measures and stimulus packages. In November, it extended the duration of the Zero Cost Facility (ZCF) - funds given to banks without interest - of Dh50 billion until June 30, 2021.

This in turn allowed banks to offer loan deferments to individuals and businesses directly affected by COVID-19.

Massimo Falcioni, CEO of Etihad Credit Insurance
Massimo Falcioni, CEO of Etihad Credit Insurance: “We focus on those sectors where employment has to be safeguarded..." Image Credit: Supplied

Saudi focus

ECI is supporting companies that have export orders to Saudi Arabia as the Kingdom undergoes a massive economic transformation. “We believe in the investments the Saudi government is putting in place to implement the economic agenda,” said Falcioni. “We have put a large amount of our budget to support exports to Saudi.”