Singapore launches new Export Coverage Scheme to provide supplemental export trade credit insurance
Export Coverage Scheme Launches Limit Top Up Facility
Singapore, Tuesday, 6 October 2009 – International Enterprise (IE) Singapore’s Export Coverage Scheme (ECS, 出口保证计划) now has a limit top-up facility. This allows Singapore companies to increase their trade credit insurance by two times of their underlying policy, up to an additional S$2 million per insured buyer.
Launched in March 2009, the ECS offers qualified Singapore-based companies protection against non-payment from buyers, with 50% of the insurance premium (up to S$100,000) subsidised by the government.
The global economic downturn has made insurers increasingly conservative, resulting in reductions in insured amount. This means that Singapore-based companies are now more vulnerable to the risk of non-payment from their buyers. For Singapore companies whose trade financing is supported by trade credit insurance, their bank lines will then also be correspondingly reduced.
An example of how the top-up facility works: A Singapore-based wholesaler of petrochemicals supplies coating resins to its customers in China and other parts of Southeast Asia. It requires S$3 million of trade credit insurance to cover against default payment by its major customers. However its underlying policy can only provide S$1 million of coverage. Under the ECS, the company can then buy top-up to cover two times the amount provided by the underlying policy, up to S$2 million, to restore cover to its required amount and maintain its business operations.
Since its launch, ECS, with its subsidised insurance premium, has insured a total trade turnover of almost S$400 million. Said Mr Roy Teo, Managing Director of FHF Safety Products Pte Ltd, “The export credit insurance scheme is a great form of assurance especially during this difficult business period. Ever since employing this scheme, we have been able to trade confidently with our customers and at the same time, lower our costs through the premium subsidy. The increase in credit limit and better terms to our customers have helped them increase their business. This in turn is a win-win business partnership.”
For more information on the ECS scheme subsidy and top up, please contact Aon Singapore, Scheme Manager, at 1800-266 4327 (AONIECS) or visit the website: www.aoniecs.sg.
Topics: business, Economy, Export Coverage Scheme, export trade credit insurance, exports, limit top up, Singapore, trade credit insurance
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