Insurance of short-term export supplier’s credits against commercial and political risks (Product A, B)
News:
Thanks to the new EU exemption valid until 31.12.2021, EXIMBANKA SR can also insure receivables for traditionally marketable territories such as the EU countries, Canada, the United Kingdom or the USA, through our product "Short-term export supplier credit insurance against commercial and political risks (Product A, B)".
Insurance of a short-term supplier’s credit enables you to provide a foreign buyer a short-term supplier’s credit (up to 2 years) and simultaneously to minimize the risks of its impacts. You, or the Slovak exporter, are the insured in this case.
Insurance of a short-term supplier’s credit is used in the case when in connection with an export contract a receivable arises to the Slovak exporter with a deferred payment up to 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:
- A – commercial risks
- B – political 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.
- Easier orientation when penetrating foreign markets - verification of the reliability of new trading partners.
- 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.
- Our experienced team will accompany you from the 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).
How it works
| Insurance procedure | |
|---|---|
| 1. | Supplier credit |
| A foreign buyer requests a postponement of the due date for the delivery of goods from your company In respect to the export contract. You can easily comply with the requirement with the help of EXIMBANKA SR. This gives you competitive advantage. | |
| 2. |
Supplier credit insurance |
| You wish to lower the risk of non-payment of a short-term supplier credit so you ask EXIMBANKA SR for the insurance. After application assessment and thorough analysis of the export territory and all participating parties (exporter, buyer and/or bank issuing the letter of credit), the insurance contract is signed. | |
| 3. |
Indemnification |
| After the insurance premium payment, the insurance contract becomes effective. In the case of insurance claim, EXIMBANKA SR provides the indemnification. |
Frequently asked questions
When is such insurance most advantageous?
The insurance is suitable primarily with shorter periods of maturity (to 2 years) without limitation by sector.
What is the period of the insurance?
The period of the insurance derives from the duration of the supplier’s credit provided. With products A, B thus with a repayment period to 2 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 assigned to 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.
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:
• A - commercial risks – the risk of non-payment of a receivable, especially due to insolvency or payment unwillingness of the buyer;
• B - 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;
• A + B - combined risks – commercial and simultaneously political risks.
How much will it cost?
The amount of the premium rate depends on several factors, such as the country of the foreign buyer, the character of the foreign buyer, the length of the contract, payment conditions and the like. The premium rate is assessed for each project individually.
How is the insurance paid for?
In the case of a one-time export, the insured pays the premium in advance in a single payment. By payment of the insurance premium the insurance policy enters into force. In the case of regularly repeating exports, the premium is paid monthly on the basis exports carried out.