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Insurance of export supplier’s credits (Product C)

Insurance of export supplier’s credits (Product C)

Insurance of a mid-term and long-term supplier’s credit enables you to offer a foreign buyer a supplier’s credit (over 2 years) and at the same time to minimize risks following from it. You, or the Slovak exporter, are the insured in this case.

Insurance of a mid-term and long-term supplier’s credit is used in the case that the foreign buyer requests in connection with an export contract a delay in repayment over two years. You are the insured and you get the certainty that you will not lose your money and at the same time you can meet the buyer half-way.

The insurance relates to political and commercial risks.

Advantages for the exporter

  • By the Insurance of short-term export credits EXIMBANKA SR relieves the exporter from the commercial and political risks arising from the receivable.
  • Your competitiveness grows, since you have the opportunity to offer the buyer, in addition to your own products, a longer payment period, which may play a key role for him in the selection of a partner in a given project.
  • A simpler transferring of a receivable to a third party (e.g. a factoring company) and you get to the money immediately after issuing an invoice.
  • Our experienced team will accompany you from first contact during the entire duration of the contract. We offer you our long years of expertise in the field of export financing (risk analysis of the country, buyer, bank, impact on the environment, and others).

Frequently asked questions 

When is such insurance most advantageous?
The insurance is suitable primarily with larger financial volumes, such as, for example, export of machine production or investment units. It depends only on the exporter; the insurance is not limited by sector.

What is the period of the insurance?
The period of the insurance is derived from the duration of the provided supplier’s credit. The supplier’s credit is used for financing mid- and long-term export contracts that is those with a maturity of more than two years.

What are the basic conditions of the insurance?
• The insurance is carried out:
o by a framework insurance policy with regularly repeated exports (revolving credit limit);
o by an insurance policy with one-time exports.
• The amount of participation in the insured event is minimally 10% and is set on the basis of a specific commercial case.
• The benefit can be pledged on behalf of a third party (e.g. your bank).
• Our mission is, among others, to support employment and the development of production capacities in Slovakia. For this reason the Slovak share in the export is an important criterion when assessing your project.

And what about impact on the environment and the social impact of the case?
EXIMBANKA SR respects its international obligations. For this reason with projects with a maturity of the loan longer than 2 years we assess their impact on the environment and the observing of human rights in the communities affected by the project. Evaluation begins with the submitting by the exporter of a filled in questionnaire which is an appendix to the insurance application. After determining the importance of the impact of the export on the environment, we assign your project to one of three categories (A, B, C) and on the basis of this we decide whether the export will be assessed by a professional appraisal of the impact of the export on the environment.

What kind of risks does the insurance cover?
The insurance is intended for non-marketable risks, i.e. those which commercial banks and insurance companies are not willing or not able to insure. The insurance covers:
• commercial risks– the risk of non-payment of a receivable, especially due to insolvency or payment unwillingness of the buyer;
• political risks– risk of non-payment of a receivable for political and administrative accidental or hard to foresee events in the country of the buyer, such as, e.g. war or other armed conflict, terrorism, unrest, strikes, revolutions, nationalization, embargo, the impossibility of transfer of payments and others. Natural disasters, such as floods or earthquakes, are also included here.

How much will it cost?
The amount of the premium rate depends on several factors, such as the country of the foreign buyer, the credit of the foreign buyer, the length of the contract, the payment conditions and the like. The premium rate is assessed for each project individually.

How is the insurance paid for?
The insured pays the premium in one payment in advance. By payment of the insurance premium the insurance policy enters into force.

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