Etihad Credit Insurance, the federal export credit agency of the UAE, has so far issued 3,605 revolving credit guarantees worth Dh2.28 billion ($620 million) to help local businesses boost their exports to different countries.
The total credit guarantees extended by the agency since its inception in 2018 contributed to Dh6.86bn in non-oil exports to more than 85 countries, the ECI said on Sunday.
“A detailed review of the performance has revealed that the 18 sectors that benefitted from our guarantees include cable, steel, petrochemicals, building materials, packaging, automotive, energy, utilities, health care and food,” said Thani Al Zeyoudi, Minister of State for Foreign Trade and deputy chairman of the agency.
He made the comments after a meeting of the agency’s board of directors in Dubai.
The ECI provides export guarantees and trade insurance to UAE companies to mitigate payment risks associated with exports.
The agency already has partnerships with a number of local and international banks that offer loans to UAE companies to fund exports, with the ECI providing insurance.
“The ECI’s continued support to UAE trade and export, despite the deep global recession caused by the Covid-19 pandemic last year, has not only continued to protect businesses' cash flows" but also eased the access of small and medium enterprises to trade finance, said Mr Al Zeyoudi.
This has helped to hasten economic recovery in the post-pandemic era, he said.
“These measures provided access to new markets to the UAE’s exporters and re-exporters and helped to stabilise the UAE economy, as well as create new opportunities for investment and project financing, thereby adding value to the UAE's non-oil gross domestic product, employment and SME sector development.”
The ECI extended Dh420m worth of trade credit support to SMEs in the first 11 months of 2020 to help companies protect their liquidity positions amid the coronavirus-induced global economic slowdown.
Last month, the UAE leadership announced a new initiative called Operation 300bn to more than double the industrial sector's contribution to the country's economic output to Dh300bn by 2031, from Dh133bn currently.
Emirates Development Bank will provide Dh30bn in financing over the next five years to support the strategy.
“Easing access to trade and project financing will highly contribute to advancing Operation 300bn and Make it in the Emirates initiatives to more than double the value of the output of the national manufacturing and industrial sector in the next 10 years,” said Mr Al Zeyoudi.
The ECI also signed an agreement with Emirates NBD to improve exporters' access to trade finance earlier this year.
As part of the deal, Emirates NBD will provide loans to UAE businesses backed by the ECI.
The agency also has partnerships with different global financial institutions to boost UAE's exports.
This year, it has teamed up with the African Trade Insurance Agency to boost cross-border trade with the continent.
It is also evaluating a partnership with its counterpart in Italy to extend trade finance for sustainable development projects.