ArmInfo. Export Insurance Agency of Armenia (EIAA) creates new efficient instrument of pre-export financing for local producers. The presentation of the new service package will be held in the upcoming days within signing of the first memorandum of cooperation with ArmSwissbank.
"A lot of producers say that they can produce more goods for export but do not have enough funds for this, and the collateral is not enough as the interest rates on loans are high. In order to receive insurance under pre-export financing an exporter should have paying capacity acceptable for the bank and export contract approved by EIAA and in this case on the basis of shareholders' guarantee EIAA is ready to insure up to 95% of the bank loan and interest rate. By this the borrower or exporter receives bank loan without collateral. This scheme is very beneficial also for the banks as guaranteed loan significantly reduces the risks and increases liquidity. Pre-export financing may be used only for producing a good, for purchasing raw materials, transportation and for paying customs duties. The matter concerns short-term expenses directly aimed at increasing or growing exportability of the produced products.
As the interlocutor mentioned international experience demonstrates that applying of export insurance services differing from traditionally known insurance services needs 3-4 years institutional formation in developing countries. As there have been no precedents of providing such services in Armenia, the Agency was actively preparing for creating potential demand- intensively worked with the exporters, commercial banks, business communities and unions in order to explain the essence of export insurance in total and pre- exporting insurance, its opportunities and conditions in particular. The employees of the agency have visited ten regions of the country, met with more than 300 entrepreneurs, used all the informational means and held explanatory talks with potential clients.
To recall, Export Insurance Agency of Armenia Insurance CJSC was founded on October 23, 2013 by the decision of the Government of the Republic of Armenia within the framework of the export- oriented industrial policy. The Company provides insurance against the financial losses incurred as a result of non-payment for supplied goods by the Foreign Buyer or its Bank, which has a payment obligation under the Contract. The services offered by our Company are efficient solution for the control of export risks of our customers. EIA is a fully state-owned company.
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