ECI launches ‘SME Protect’ to enhance competitiveness of SMEs

Business Bureau, Gulf Today

Etihad Credit Insurance (ECI), the UAE Federal export credit company, has announced the launch of ‘SME Protect’, an export trade credit solution, specifically designed for UAE-based SMEs to support their growth plans globally and assist them in entering high-growth markets.

‘SME Protect’, which will be available to exporters and re-exporters from September 1, 2019, is a cost-effective and easy to access and manage solution to move on from the limiting and traditional Letters of Credit or cash payments terms, towards the most updated sales on open credit terms.

‘SME Protect’ is aimed at easing UAE businesses to broaden their understanding of trade credit solutions and to accelerate their export business in a safe way. By providing guarantees to receivables, SMEs can now provide credit to clients without financial loss.

Engr. Saed Alawadi, Chief Executive Officer of Dubai Export Development Corporation, Board Member and Chairman of the Executive Committee at ECI, said: “The UAE government is committed to boosting the contribution and performance of local SMEs and has taken a leading role in establishing strategic initiatives to support funding for the sector. ECI’s newly launched ‘SME Protect’ will assist exporters and local businesses to access highly competitive global markets.”

Massimo Falcioni, CEO of ECI, said: “We are proud to launch ‘SME Protect’ for UAE businesses to support SMEs towards safer trade, and high-growth at different stages of their life cycle. The SME Protect Trade Credit solution is a result of the survey that was conducted in 2018 in co-operation with Abu Dhabi Chamber of Commerce, Dubai Chamber of Commerce, and Ras Al Khaimah Chamber of Commerce. The survey showed that 97 per cent SMEs still prefer Letter of Credit and cash payments whereas only 3 per cent prefer selling on credit. ECI, in line with its mandate, has endeavoured to fill the gap to ease of doing business, accelerate the SME growth and sustain the non-oil foreign trade growth development in the UAE.”

Oussama Abdel Rahman Kaissi, Chief Executive Officer of ICIEC, said, “We are committed to support ECI and welcome this opportunity to partner on such a strategic initiative as SME Protect solution. ICIEC is confident that this solution will empower the small and medium-sized companies by mitigating the risks and challenges faced by these local businesses while accessing competitive markets.”

According to the Federal Competitiveness and Statistics Authority, the contribution of the SME sector to the UAE’s GDP is estimated at 53 per cent in 2019, up from about 49 per cent in 2018. The Federal government aims to increase this rate to around 60 per cent by 2021, underscoring the importance of this sector, which encompasses around 95 per cent of the firms in the country and employs 86 per cent of the total workforce in the non-oil private sector.

Meanwhile, Etihad Credit Insurance last month signed a Memorandum of Understanding (MoU) with the Corporate Banking division of Emirates NBD, a leading bank in the region to provide export insurance services to UAE companies, enabling them to expedite their global business reach.

This partnership will empower UAE-based firms to strengthen their presence regionally and internationally by providing them access to ECI’s comprehensive range of trade credit insurance solutions and Emirates NBD Corporate Banking’s customised products such as trade finance solutions while including but not limited to trade receivables, discounting, pre-shipment, export funding, surety bonding as well as advisory services. This cooperation underlines ECI and Emirates NBD’s shared commitment to achieving UAE’s non-oil diversification strategy embodied in the country’s 2021 vision and goals.

The MoU was signed by Massimo Falcioni, CEO of ECI and Ahmed Al Qassim, Executive Vice President, General Manager of Corporate Banking, Emirates NBD in the presence of senior officials from both organisations.

The collaboration between ECI and Emirates NBD will focus on areas that include trade credit risk management solutions, export financial tools, surety bonds, export financing, SME financing, aircraft financing, corporate financing, bond support and Letters of Credit Confirmation. The partnership will enable businesses to access customised and structured financial solutions combined with global expertise to meet their evolving needs. This allows ECI to leverage Emirates NBD’s institutional relationships, on-ground expertise, strong experience in capital investments and impressive track record in wholesale banking to support the regional and global expansion of local businesses.

Massimo Falcioni, Chief Executive Officer, ECI, said, “Growing business regionally or globally plays a crucial role in building a strong, diversified, and sustainable economy of the country. ECI’s mandate is to give ease of access to financial solutions to local businesses. Given our national mandate and Emirates NBD’s expertise, we are confident that we will empower UAE-based exporters and local businesses to expand their footprint regionally and globally.”