Etihad Credit Insurance rolls out Sharia-compliant solutions to boost halal industry

Spending in halal food, pharmaceuticals and Islamic lifestyle sectors is projected to reach $3.2tr by 2024

Containers are stacked at the port of Jebel Ali, operated by the Dubai-based giant ports operator DP World, in the southern outskirts of the Gulf emirate of Dubai, on June 18, 2020. - The chairman of DP World said it is "preparing for the worst" with the full impact of coronavirus to hit in coming months, as global trade suffers its worst blow since World War II.
The firm and its subsidiaries are a major source of cash for the emirate's economy, one of the most diversified in the oil-rich Gulf but mired in a long malaise. (Photo by KARIM SAHIB / AFP)
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Etihad Credit Insurance, the federal export credit agency of the UAE, rolled out new Sharia-compliant export credit solutions on Wednesday to boost the country’s halal trade industry.

“Through our Sharia-compliant trade credit, finance, and investment solutions, ECI [is] ... supporting the UAE’s non-oil sector and boosting the competitiveness of businesses… These solutions will provide UAE businesses operating in halal trade with a competitive advantage in the international market,” ECI chief executive Massimo Falcioni, said.

The agency said that it will offer trade credit insurance, which offers whole turnover policy, single risk short term policy, and single risk long term policy, letter of credit confirmation Insurance; Islamic export finance and foreign investment insurance under its Sharia-complaint solutions.

"With these trade credit solutions, ECI can help companies recover the cost of fulfilling an order that is terminated by events outside their control, such as insolvencies, non-payments, and other adverse impacts of Covid-19," ECI said.
In addition, companies who avail of these solutions can also get loans and additional funding capacity from banks at a concessional rate, guaranteed by ECI, the statement said.

Worldwide spending in halal food, pharmaceuticals and Islamic lifestyle sectors is projected to reach $3.2 trillion by 2024, up 45 per cent from 2018, according to the State of the Global Islamic Economy Report 2019/20, commissioned by the Dubai Islamic Economy Development Centre (DIEDC) and developed by the US-based DinarStandard.

The growth will be fuelled by affluent Muslims, increasing adherence to ethical values, continued engagement by global multinationals and investors, and a growing number of national strategies dedicated to halal products and related opportunities, according to the report.
"This upward trend can further be strengthened with more extensive use of secure trade credit because it can help businesses free up cash flow and finance growth," Mr Falcioni, said.

ECI, set up in 2018, provides guarantees and insurance solutions to mitigate the political and commercial risks of exporting by offering financing or refinancing for export transactions on behalf of the UAE government. The entity has partnerships with local and international banks that can offer loans to UAE companies to fund exports to overseas buyers, with ECI providing insurance.