Etihad Credit Insurance in pact with FAB to boost funding to UAE exporters

The ‘UAE Trade Finance Gateway’ initiative will tackle challenges faced by small and medium enterprises

FAB is the first commercial bank to join this initiative and other commercial lenders are expected to follow. Pawan Singh / The National

Etihad Credit Insurance, the UAE’s federal export credit agency, signed an agreement with First Abu Dhabi Bank and Crediti Fintech to help exporters and re-exporters to obtain finance easily and boost their business.

The new initiative "UAE Trade Finance Gateway" will tackle a number of challenges faced by small and medium enterprises, including the lengthy process of procuring finance and restrictions on the availability of funding, ECI said on Sunday.

“Through this partnership, exporters and re-exporters will benefit from seamless and fast access to financing solutions, bringing together the insurer, banks and exporters [under] one unified platform,” it said.

“ECI insurance cover will enable exporting SMEs to obtain collateralised loans from FAB, leveraging the advanced technology of MoniMove platform. SMEs will benefit from an end-to-end digitised process encouraging smooth collaboration between all parties and accelerating access to financing products.”

FAB is the first commercial bank to join this initiative and other commercial lenders are expected to follow.

The new initiative is supported by the UAE's Ministry of Economy and is expected to contribute to the UAE’s "Operation 300bn" industrial strategy that seeks to nurture the local manufacturing sector to diversify the country's economy, create jobs, attract foreign investment, improve local skill sets and export locally made products.

As part of this strategy to drive industrial growth, the UAE aims to double the industrial sector's contribution to national economic output to Dh300bn ($81.68bn) by 2031, from Dh133bn currently. Easing SMEs' access to funding is a key part of this strategy.

“The Unified Trade Finance Gateway will leverage technology, data and customer relationships to accelerate the growth potential of the nation’s SMEs, start-ups and entrepreneurs, and support the UAE’s strategy for a sustainable and diversified future economy,” Shireesh Bhide, head of corporate, commercial and international banking at FAB, said.

Established in 2018, ECI provides export guarantees and trade insurance for UAE companies to minimise payment risks associated with exporting.

It has partnerships with local and international banks that offer loans to UAE companies to fund exports to overseas buyers, with ECI providing insurance.

The ECI issued Dh3.4 billion worth of revolving credit guarantees as of September 2021. The volume is three times higher than the guarantees issued last year for the same period, the company said.