THE Export Credit Gua-rantee Corporation of Zimbabwe (Pvt) Ltd (ECGC) says it is enhancing its credit operations at a time when Zimbabwe’s economy is facing several challenges. <
The EGGC is a private company whose primary mandate is to promote Zimbabwean exports.
A company spokesman said it was becoming very difficult for customers to settle their debts at the moment because of the various difficulties caused by economic hardships as well as the soaring inflation.
The country’s inflation is around 400% but analysts predict it will reach the 1000% mark by year-end.
“The ECGC provides export credit insurance cover to exporters, big and small against non-receipt or delayed receipt of payments from foreign buyers resulting from commercial and non commercial risks,” the spokesman said.
“It also provides domestic credit insurance cover to companies against commercial credit risks inherent in local transactions.”
He said the company also issued guarantees to institutions which advance pre- and post- shipment working capital financing to exporters.
“We advise exporters on credit worthiness of foreign buyers,” he said. “As a businessperson, you are probably well aware that bad debts can arise from any customer for a variety of reasons. No one can be sure that 100% of the outstanding receivables will be paid.”
He said some of the ECGC benefits at the moment were that customers were assured that their cash-flow would not be interrupted even if some of the customers were in financial difficulties.
“Hence the corporation’s products assure you stable cash-flows and flexibility in administering your receivables portfolio,” he said.
“Individuals must be confident to enter new markets and find new buyers abroad because export credit insurance will cover the risks, buyer-related as well as political. Thus it supports prudent penetration of higher risk foreign markets.”
He said the ECGC continued to sell safely on credit terms and compete effectively against other suppliers.
“The credit rating of your business is enhanced in the eyes of bankers, suppliers and other business partners,” he said. “The insurance policy can be ceded to a bank as additional security to obtain additional financing or perhaps even financing on better terms than the bank might otherwise have been prepared to offer.”