Etihad Credit Insurance, the UAE’s federal export credit agency, signed a preliminary deal to provide more trade finance solutions to customers of Tradeling, an e-marketplace focused on business-to-business transactions.
Under the agreement, ECI will provide Tradeling’s customers with solutions that will protect them against commercial and non-commercial risks arising from customers’ insolvency, protracted defaults and supply and political risks. The deal will also provide them with market intelligence and grant them access to international trade.
“In today’s complex economic and trading ecosystem, it is indispensable to have businesses protected by proper insurance solutions," said Massimo Falcioni, chief executive of ECI.
"By associating with a dominant digital business platform in the region, we intend to reach out to numerous local businesses supporting them with our trade credit insurance services and global network of more than 320 million businesses worldwide.”
The deal allows sellers to "sell their products to the UAE market with a high level of government protection and support" while UAE SMEs are able to safely export their products, said Marius Ciavola, chief executive of Tradeling.
ECI backs UAE manufacturers by facilitating access to trade finance, which boosts their exports, enhances their competitiveness in international markets and reduces the cost and timeline of obtaining funds. The agency aims to support companies with Dh3.3 billion ($898.4 million) in revolving credit guarantees, the equivalent of Dh10bn worth of non-oil trade, by year-end, Mr Falcioni told The National earlier this year.
The agency plans to offer Dh2bn in bank guarantees by the end of the year to UAE lenders, to help local businesses get easier access to trade finance, he said.
ECI also plans to grant UAE companies at least Dh200m in project financing and at least Dh100m to protect local investors against political risk in host countries by the end of this year.
As per ECI's latest agreement, Tradeling's customers will be insured for invoice discounting, which is a finance facility when a company’s unpaid invoices are used as collateral for a loan. It also plans to provide solutions that will benefit small, mid-cap and large enterprises, using Tradeling’s platform.
ECI will also facilitate finance policies on a case-by-case basis, according to the requirements of Tradeling’s customers.
Tradeling will conduct events in co-operation with ECI to provide its customers with information about the advantages of trade credit insurance and how it can be used to ensure the growth as well as continuity of their business.
