UAE, Kazakhstan export credit agencies sign agreement to boost trade

The export credit agencies of the UAE and Kazakhstan have signed a cooperation agreement to advance trade and economic relations between the two countries

Etihad Credit Insurance (ECI) and Export Insurance Company (KazakhExport) signed an MoU to enhance trade and support sustainable economic growth between the UAE and Kazakhstan.

The MoU, which is in line with the “We the UAE 2031” vision, is aimed at strengthening bilateral economic relations between the two countries, driving the business of exporters and small and medium-sized enterprises (SMEs) towards prospects for sustainable growth across different including renewable energy and the manufacture of halal products.

ECI and KazakhExport agreed to provide Shariah-compliant insurance, trade credit and export solutions to the UAE and Kazakh exporters to protect them from potential commercial risks in international dealings.

The deal allow both parties to cooperate in organising workshops aimed at educating SMEs on the advantages of using trade protection solutions to mitigate the risks of non-payment resulting from several commercial and geopolitical factors.

Raja Al Mazrouei emphasised the strategic significance of the partnership, saying, “By entering into this agreement with KazakhExport, we are strengthening our dedication to enhancing the global competitiveness of businesses within the UAE and Kazakhstan.

“This vital partnership directly aligns with ECI’s mission to boost non-oil exports, simultaneously extending comprehensive protection to SMEs, thereby enriching the UAE’s economic diversification,” Al Mazrouei said.

The two entities also agreed to form a task force to explore more opportunities for cooperation, with a focus on seven strategic areas, including insurance, trade promotion and programmes for supporting SMEs’ business.

The UAE is Kazakhstan’s largest trading partner in the GCC region, with the total trade exchange between them exceeding about $632.6m at the end of 2022 while exports from the UAE to Kazakhstan amounted to about $72.3m.

Export credit agencies offer loan guarantees, and sometimes direct financing to overseas buyers, to facilitate the export and supply of domestic goods or contractors.

UAE trade agency boost trade

Meanwhile, ECI plays an integral role in supporting the UAE’s economic development, cementing the country’s position as a global hub for businesses and trade.

The Board discussed the company’s milestone achievements in 2022 and reviewed its annual report;

The trade agency registered a 26 per cent increase in the value of non-oil insured turnover secured for exporters and SMEs to reach Dhs14.4bn in 2022 compared to a year earlier.

ECI issued 8,140 revolving credit limits in 2022, up 23 per cent compared to 6,620 revolving credit limits issued in 2021. Similarly, the value of the company’s underwritten exposure reached Dhs8.1bn, a 45 per cent increase compared to Dhs5.6bn during the same period the previous year.

The firm protected and facilitated UAE’s non-oil exports to 106 countries, compared to 92 in 2021, while expanding into new markets, including Egypt, Iraq, Senegal, Saudi Arabia, India, Ghana, Angola, the UK and Oman.

ECI was assigned AA-‘s insurer financial strength and long-term issuer default rating by Fitch Ratings in November 2022, citing robust ratings as the country’s strategic governmental function in the promotion of UAE’s non-oil exports and strategic sectors’ development to achieve the country’s economic agenda.

Other key drivers include ECI’s government ownership, very strong capitalisation with no debt under its capital structure, as well as its prudent investments, strong reinsurance programme; and profitable underwriting.

Read: Etihad Credit Insurance partners with RAKEZ to boost the emirate’s non-oil foreign trade