2. EXPORT CREDIT GUARANTEE CORPORATION OF ZIMBABWE (PRIVATE) LIMITED
THE ROLE OF CREDIT INSURANCE IN FACILITATION OF EXPORT TRADE
Presented By : Sekai Chirume, Managing Director – ECGC
To: Enhancing Trade and Investment Seminar
Venue: Cresta Lodge Hotel, Harare
Date: May

3. Contents Why Export Background of Export Credit Insurance ECGC
Products & Services
Export Payments Insurance Policy
Risks Covered – Commercial & Political
Country Assessment
Buyer Assessment
Benefits of Export Credit Insurance
How is the Insurance Obtained

4. Why Export The need for foreign currency Increased sales and profits
Make use of excess production capacity
Enhance competitiveness
Gain global market share
Reduce dependency on existing domestic market

5. Background of Export Credit Insurance
Originated in Europe
Concept to address promotion of exports
Insurance protection against non-payment risk in foreign markets
Covers losses arising from both political and commercial risks
Examples are Sinosure, CGIC, BECI, ECGD, ECGCI
ECGCZ is a member of the Berne Union (International Union of credit and Investment Insurers)

6. ECGC Objectives A private company wholly owned by RBZ
Reinsures both commercial & political risk
A member of the Prague Club
Objectives
To promote & facilitate Zimbabwe’s international trade
Assist new exporters & SMEs to access export finance from Banks
To provide business information on foreign risks
To enhance exporters’ competitive position
To provide specialized skills in risk assessment

7. Products & Services on Offer
Insurance Division
Guarantees Division
Export Payments Insurance Policy (EPIP)
Pre & Post Shipment Export Finance Guarantee (PEFG)
Domestic Payments Insurance Policy (DPIP)
Construction Bonds
Services Policy
Customs Bonds
SME Exporter’s Policy
General Insurance
Bid & Performance Bonds

8. Export Payments Insurance Policy (EPIP)
Risks Covered
Commercial & political
Percentage of Cover
90% for large exporters
95% for SME Exporters
Monthly Declaration & Premium Payment
By the 14th day of the following calendar month
Claims Payment
Within 30 days after signing of proposed settlement
Recoveries
Shared in the same proportion in which loss was borne

9. Risks Covered Political Risks Commercial Risks War, civil disorder
Buyer Insolvency / liquidation / Receivership
Foreign exchange transfer delay
Buyer’s protracted default
Payment moratorium
Buyer’s non-acceptance of goods
Cancellation of buyer’s authority to import
Insolvency of bank, issuing or confirming an L/C
Failure by foreign govt buyer to fulfil contractual obligations

10. Country Risk Assessment (Five categories used)
Group
Risk Status
Examples A
Very Safe Countries
Germany, Spain B
Safe Countries
South Africa, Botswana C
Moderately Safe Countries
Namibia, Kenya D
Risky Countries – tread with care
Uganda, Cameroun Z
High Risk Countries
(Trade on secured terms)
Iraq, Lebanon

11. Factors Used in Country Assessment
Domestic political and social situation
External relations of the country
Economic structural factors
Domestic, economic and institutional situations
Balance of international payments and external debt

12. Buyer Risk Assessment (Commercial Risk)
Creditworthiness of buyer
- Form of business & age
- Terms of payment
- Commercial morality
- Financial standing
- Credit ratings
- Past trading experiences if any
Sources of Information
-Information Bureaux
- ECGC’s own underwriting experience
-Banks
-Other Export Credit Agencies

13. Benefits of Export Credit Insurance
Compensation in case of a loss occurring
Business growth:
EPIP allows you to enter new markets with confidence
EPIP enables you to expand your presence where your business is already active.
Increases exporter’s access to finance
Easier access to information on customer credit worthiness
Assistance in solving collection difficulties

14. How is the Insurance Obtained
1) Proposal Form
2) Quotation
4) Issue of Policy
3) Offer Letter &
Acceptance

15. Conclusion
Export Credit Insurance is a vital element of the economic infrastructure as it allows exporters to accept foreign transaction risks while avoiding possibilities of catastrophic loss.
Without the support offered by Export Credit Insurance, some exports would not take place.

16. I THANK YOU Our Contact Details 6 Earls Road Alexandra Park Harare
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Cell: Marketing
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