Export Credit Insurance and Guarantee Scheme
Government of Georgia has initiated mechanism to introduce export finance instruments in Georgia to facilitate export of Georgian goods and services, improve competitiveness of Georgian Exporters, diversify export markets of Georgia and expand list of exported goods and services and exporters from Georgia particularly with high-added value component, and overall to unleash Georgia’s export potential. To address this purpose, Partnership Fund, Georgian State owned Investment Fund, developed export credit insurance and guarantee scheme to be launched in Georgia. The scheme will cover risks, related to pre-export and post export transactions, to mitigate exporter’s credit risk on foreign sales on open accounts and to make them acceptable for commercial banks to factor, thus to facilitate access to finance.
Export Credit Insurance and Guarantee scheme initially will have two components: Export Credit Insurance and Export Credit Guarantee:
About Export Credit Insurance: Credit Insurance relates to short-term insurance services in foreign markets and addresses the needs of exporters willing to insure their invoices with deferred payments originated from contracts related to the supply of goods/services. Under the insurance policy the turnover from selected buyers is covered. Credit Insurance covers the risk of losses due to unpaid receivables caused by one or more commercial and political events of default. More specifically, the cover may be related to the combination of political and commercial risks or to commercial risks only. The credit insurance policy will be issued for short term period. Exporters will have opportunity to grant the rights defined by the insurance policy to financial institution and factor or discount the relevant invoices to improve cash liquidity.
About Export Credit Guarantee : Working Capital guarantees loans supplied to local firms for supporting the capital requirements needed for preparing supplies of goods, services and/or works abroad. This is a guarantee on loans with the purpose to supporting liquidity requirements of local firm for preparing supplies of goods, services and/or works abroad.