Businesses the world over need protection against the risk of losses and bad debts if they are to remain viable and sustainable, especially in today’s challenging economy. Imagine supplying a large order to a client and not being able to collect despite your best efforts. As untenable as this might seem, most, if not all businesses, will experience this problem at some point in their life cycle.
The EXIM Bank’s Trade Credit Insurance (TCI) product was born out of this need to make entities in the productive sector as impermeable to trade risks as possible, while simultaneously providing business operators with a policy that can be used as collateral to facilitate easy access to low cost working capital loans. It 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 payment default for up to as much as 85% of the insured or gross invoice value.
Being a TCI policyholder also enables a business operator to use the policy as collateral to access competitively priced short-term working capital loans. This opportunity to increase liquidity presents a clear competitive advantage as policyholders can confidently extend credit limits to their customers, increase sales volumes and keep production going while they wait to collect their receivables. The introduction of this product has enabled a number of beneficiaries in the SME sector to stay on a growth path while meeting the demands of local and overseas buyers.
"The TCI policy which provides coverage against non receipt of payment by foreign and local buyers is a tangible demonstration of the Bank’s commitment to meeting the trade credit needs of our customers as we work together in increasing Jamaica’s productive capacity now and into the future”, said Mrs. Valerie Crawford, EXIM Bank’s Manager, Trade Financing & Risk Management. She went on to say that what this policy change also means is that an increased number of Jamaican producers, including entrepreneurs who will be taking advantage of opportunities created by the Logistics Hub Initiative, can now benefit from its offering.