The Union for Export Credit, the credit protection company of the Federal Government of the United Arab Emirates, has confirmed its commitment to support local companies to continue doing business and trade, as it seeks to address the repercussions of the Corona Virus that resulted in the fear of financial institutions and private insurance companies in providing their services to A number of sectors due to lower demand and weak supply chains.
"Etihad Export Credit Company appreciates the effective efforts made by the wise leadership in the UAE to prevent the spread of the Corona virus, and in its endeavor to revive its economy in light of these difficult times. Possible, the Export Credit Union continues to support local companies to give them confidence to do trade and business. ”
He added: "The Union Export Credit Company plays a major role in restoring companies' confidence in the commercial market, by protecting them from commercial and political risks, and facilitating access to finance, and access to other suppliers and new markets."
Emirati companies operating in the local market or exporting to international markets realize the importance of protecting their trade receivables. Through commercial risk reduction tools, these companies can avoid losses in risky markets as a result of commercial transactions with open credit accounts.
In the case of doing business within an open credit limit, products or services are shipped and delivered before the payment is due, which is usually within 30, 60 or 90 days. In the event that the buyer fails to pay, whether he is unwilling or unable to pay, the commercial credit protection solutions are the best way to offset losses and ensure that the exporter gets his commercial dues from the buyer. Markets have seen increased demand for risk reduction tools during the outbreak of the new Corona virus. However, private insurance companies refrain from providing services to local companies in order to avoid risks. Therefore, the Export Credit Credit Union, as the credit protection company of the Federal Government of the UAE, is protecting the UAE exports and enhancing its global competitive edge.
Helping companies avoid losses when buyers go bust
In this regard, the Union Export Credit Company recently supported an Emirati company in protecting its commercial dues from a leading American company that declared bankruptcy. It is noteworthy that the Emirati company working in the field of fiber industries had dealings with the American company that was requesting shipments regularly, before knowing that it had declared bankruptcy.
The commercial entitlements of this Emirati company were protected by the "Export Credit Union", otherwise it would have been extremely difficult to collect them due to the complexity of bankruptcy procedures and local laws and regulations in a foreign judicial authority.
On the other hand, a small and medium-sized company based in the UAE wanted to expand and put its mark in the global markets, and I knew then that international buyers preferred to trade with an open credit limit, which the company was not sure to provide. To resolve this, this company signed a commercial credit protection policy contract with the Export Credit Union to contribute to avoiding the conversion of trade receivables into bad debt later. Then the company started to extend the credit terms to be more competitive in the market and to be able to enter new markets.
Commenting on this topic, Massimo Valesioni said: "With the reopening of economic activities in the UAE and the resumption of travel for certain countries, more emphasis will be placed on managing liquidity by both the buyer and the seller. Importers prefer to deal with exporters who can provide longer payment terms. On the other hand, exporters will focus on protecting their balance sheets and their main assets: trade receivables.
Valcyone concluded by saying, "By taking advantage of the insurance and financing solutions provided by the Union for Export Credit, exporters can provide their products and services on flexible credit terms, and they can ensure that they will be compensated if the buyer fails to pay. I urge companies to communicate with the Union for Export Credit to enable From avoiding the risks associated with collecting trade receivables, which support cash. "