Dubai export credit agency seeks more funding

The chief executive of Export Credit Insurance Company of the Emirates would like to solicit other emirates to expand its capacity.

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The UAE's main export credit agency needs beefing up to help boost trade across the country, its chief executive says.

Demand is rising for export credit at a time of heightened instability in regional markets.

The Export Credit Insurance Company of the Emirates (ECIE) receives finance only from the Government of Dubai, where it is based.

But officials would like to see other emirates contribute to help bolster its role nationally.

"The main objective has to be supporting businesses," said Saed al Awadi, the chief executive of ECIE and of Dubai Exports, the government agency that oversees ECIE.

Export credit agencies are a useful tool for governments to help drive the non-oil private sector through exports. They provide insurance to protect suppliers against the risk of a buyer defaulting on payment for goods.

"Export credit is the number one service we provide," Mr al Awadi said yesterday, on the sidelines of an export event in Dubai. "For the UAE it should be a very important service given to companies."

ECIE was set up by the Dubai Government two years ago to help companies establish export markets. It is licensed by the UAE's Insurance Authority.

Despite strong demand, limited resources restrict how much financing it can provide.

As a result, many businesses were using international credit agencies, which were often expensive, said Mr al Awadi. Other companies rely on banks to insure trade deals but they also often charge higher premiums.

ECIE's premiums were generally cheaper despite charges to countries embroiled in turmoil creeping up in recent months, he said.

PTL Solar, a maker and supplier of solar power products, would consider using an export credit agency if it was more readily available, said Amrit Soni, an assistant manager at the company, based in Dubai.

"In Algeria, Tunisia and Egypt there are potential clients for us but due to the recent unrest we are unable to access them," said Mr Soni. "We are waiting for stability in the market."

ECIE expects growth of between 20 and 25 per cent this year, slightly lower than it initially forecast, due to the effects of unrest in the region.

"There's demand but also risk with demand," said Schuyler D'Souza, the chief commercial officer of ECIE. "There are markets we are asking more questions about and others where we have had to stop."

Insurance for trade with Libya has stopped, with higher premiums attached to exports to Bahrain, Mr D'Souza said.

Most of the exporters using ECIE are in Dubai, which accounts for about 70 per cent of the country's non-oil exports.

Abu Dhabi has plans to encourage more companies in the emirate to start exporting. It wants to raise the contribution of non-oil exports to the capital's GDP to 11 per cent by 2030 from 1.5 per cent now.

The Abu Dhabi Department of Economic Development is in the final stages of setting up an export-promotion agency.

Officials from the emirate have also held talks with ECIE about the possibility of expanding its role in the emirate, instead of setting up a separate agency.

Most countries, including Egypt and Saudi Arabia, have only one export credit agency.