February 18, 2016
International trade continues to drive globalization, creating viable opportunities for Jamaican products to enter new markets to fill existing demand for local products overseas. With EXIM Bank’s Trade Credit Insurance (TCI), businesses can now confidently take advantage of opportunities to explore new markets and increase sales and revenues without having to worry about the risk of non-payment.
The Bank's Trade Credit Insurance is a unique and affordable product that offers Commercial Risk Coverage to Jamaican businesses against the non-receipt of payments from both foreign and domestic buyers due to bankruptcy, insolvency and even payment default, for up to 85% of the gross invoice value. Another optional but important feature of the product, is the Political Risk Coverage element that protects policyholders, at an additional premium, against non-payment by foreign buyers due to political unrest, currency issues and cancellation of import/export licenses, for up to 90% of the gross invoice value.
TCI is available to business entities registered in Jamaica and coverage is applicable for the following types of transactions: export sales of goods and/or services; domestic sales of Jamaican manufactured goods only; third country sale of goods supplied by subsidiaries of Jamaican companies; sale of goods only, supplied by subsidiaries of Jamaican companies located and operating within CARICOM.
Importantly, the Policy provides a safeguard for policyholders in that, the EXIM Bank, in establishing a Credit Limit for each buyer, undertakes the responsibility of conducting credit checks on the buyers to ascertain their credit worthiness. This helps the policyholder to select the right customers with which to do business and provides a guide regarding the level of exposure to be accorded. This is particularly important for entities wanting to expand their reach into existing markets or enter new markets.
The TCI Policy can also allow entities to access competitively priced short term, working capital loans from the Bank using the policy as collateral, as the issue of limited cash flow continues to bedevil local businesses. Under a specially designed financing programme, Insurance Policy Discounting Facility (IPDF), policyholders can access up to 80% of the value of their receivables for approved buyers. This access to working capital, presents a clear competitive advantage, as credit terms
can be confidently extended to customers pending the collection of receivables, resulting ultimately in business growth.
TCI has been delivering significant benefits for a number of Jamaica's large exporters during periods of expansion. It has also enabled a number of beneficiaries in the small to medium-sized business sector to stay on a growth path, even during challenging times.
Trade Credit Insurance is another tangible demonstration of the Bank’s commitment to meeting the needs of Jamaica’s SME’s, the drivers of economic growth and development and to contributing to an increase in the country’s productive capacity.