Etihad Credit Insurance, the UAE's federal export credit agency, issued 5,235 revolving credit guarantees worth Dh3.1 billion ($845 million) in the first eight months of this year, equivalent to Dh9.3bn of non-oil trade, as it looks to boost the competitiveness of local companies in international markets.
The support provided from January to August exceeded the Dh5bn in trade finance backing that ECI granted during the full year of 2020, the government agency said on Sunday, following its third board of directors meeting this year.
The credit guarantees cleared the way for exports to 83 countries and across 18 sectors, surpassing the 75 countries and 15 sectors served in 2020, it said.
“All of these result in accelerating and sustaining the UAE’s economic diversification,” Dr Thani Al Zeyoudi, Minister of State for Foreign Trade and deputy chairman of ECI's board of directors, said.
“The UAE puts utmost priority on supporting the growth of local businesses, which positively impacts the growth of economy and employment. ECI continues to play a crucial role in this regard.”
ECI backs UAE manufacturers by arranging access to trade finance, which boosts their exports while enhancing their competitiveness in international markets and reducing the cost and timeline of obtaining funds.
The agency plans to back UAE companies with Dh3.3 billion in revolving credit guarantees by year-end, its chief executive Massimo Falcioni told The National in June.
The UAE is focused on developing its local manufacturing industry to diversify its economy, create jobs, attract foreign investment, improve local skill sets and export locally-made products.
As part of its strategy to drive industrial growth, the country aims to double the industrial sector’s contribution to national economic output to Dh300bn by 2031, from Dh133bn currently.
The top sectors served by the state-backed support so far this year include chemicals (22 per cent of the total value), metal and steel (12 per cent), cables (20 per cent), building material (7 per cent), packaging (6 per cent), automobile (5 per cent), utilities (5 per cent), and food (6 per cent).
The support to UAE companies facilitated their exports to countries including Saudi Arabia, Iraq, Oman, India, Kuwait, Jordan, Egypt, South Africa, the UK, Hong Kong and France.
ECI is on track for its goal to secure Dh10bn worth of non-oil trade by the end of 2021, Dr Al Zeyoudi said.
The credit insurance agency is aiming at covering Dh27bn worth of non-oil trade by 2024, it said.
Among its services, ECI protects small-and-medium enterprises from potential risks with its ‘SME Protect’ programme to assist them in penetrating high-growth markets.
The export credit agency is also supporting UAE companies to enter the fast-growing Islamic economy through its ECI Islamic programme.
To ease access and reduce the cost from bank financing for traders, ECI provided guarantees to fund UAE manufacturers for export finance, discount receivables and supply financing worth Dh1.1bn. Of this, 87 per cent, or Dh960 million, has been extended to UAE exporters.
ECI also supported project financing abroad in projects that use UAE products and services, providing guarantees of Dh140m.
In its board meeting, ECI discussed a joint project that aims to position the agency as the main gateway for exporters and re-exporters to trade credit and financial solutions provided by all participating entities, including Emirates Development Bank, Abu Dhabi Exports Office, Khalifa Fund for Enterprise Development and ECI.