Etihad Credit Insurance (ECI), the UAE Federal export credit company, has issued over 1,400 revolving credit guarantees covering AED4bn ($1.1bn) worth of non-oil exports from January to June 2020, thereby providing solid contribution to employment and the non-oil economy of the country.
In line with its mandate to boost national export activity and economic diversification, ECI has insured non-oil exports to more than 70 countries, ensuring business continuity from the early days of the coronavirus outbreak to the height until the easing of the COVID-19 pandemic, the company says in a statement.
The top beneficiaries of ECI in terms of sectors in the first half of 2020 are cable (35%), steel (26%), and petrochemicals (13%). These sectors represent three-quarters of ECI’s insured sectors. Meanwhile, the healthcare (9%), automotive (9%), building materials (7%), and food (1%) sectors rounded out the beneficiaries.
ECI CEO Massimo Falcioni says that the substantial amount of credit guarantees issued by the federal export credit company—along with the fiscal stimulus packages floated by the UAE government—provided a safety net and a stable source of support for UAE exporters and re-exporters.
“The UAE maintained its economic activity during the global health crisis by utilising technology to the fullest, for which it has invested greatly long before the pandemic struck the world. By doing so, the country was able to mitigate the worse effects of the COVID-19 pandemic on our economy, showing what vision and wise leadership can do,” Mr Falcioni explained.
“Even if the coronavirus pandemic brought global trade to a halt, ECI has continuously fulfilled its role as an economic stabiliser. We are working in joint cooperation with Chambers of Commerce as well as Airports and Ports Free zone authorities to ease SMEs’ access to trade finance solutions. In line with the UAE government’s measures that aim at shielding corporates from the impact of global economic downturn, ECI has issued 1,468 revolving credit guarantees for a total exposure amount of AED1.6bn which is equivalent to AED4bn guaranteed non-oil export coverage in the first half of the year to support exporters as they grow in the international market,” Mr Falcioni stressed.
To further support exports, ECI has increased payment protections, relaxed terms for policyholders, and expedited approvals and claims processing. The company has also introduced flexibility on premium rates despite the increase in bankruptcy risk to continuously provide stable risk coverage.
ECI has also become a backstop for the supply chain with its increased financial support on aspects indirectly related to exports, such as coverage for working capital, pre-shipment finance, supply financing guarantees, and support to domestic suppliers and exporters.
Etihad Credit Insurance was established by UAE Federal Government and the governments of Abu Dhabi, Dubai, Ras Al Khaimah, Fujairah and Ajman. The company started its operations in February 2018.