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Documentary Credit Insurance (DCIP)

Documentary Credit Insurance (DCIP)
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This product protects banks and financial institutions from the risk of non-payment on confirmed letters of credit. The confirming bank obtains an insurance policy from the Saudi EXIM bank after the foreign bank issues a letter of credit. If the foreign bank defaults, Saudi EXIM bank compensates the local bank and then recovers the amount from the foreign bank, sharing a portion with the local bank after deducting fees.​

Properties
Product Method

1- The importer arranges for the issuance of a letter of credit.
2- The foreign bank issues a letter of credit to the confirming bank.
3- The confirming bank enters into an insurance policy contract with Saudi EXIM and pays the insurance premium.
4- In case the foreign bank fails to pay, the confirming bank files a claim to Saudi EXIM, which compensates the local bank for the loss.
5- Saudi EXIM recovers the amount from the foreign bank and returns a share to the local bank according to their risk-bearing ratio after deducting fees and legal costs.

Product Advantages

- Providing capacity-building support for banks and financial institutions in accepting facilities for Saudi exports.
- Facilitating exporters' access to credit facilities.
- Reducing credit risks.
- Increasing export volume and access to high-risk markets.

The Sectors Eligible to Benefit from The Product

All sectors except crude oil

Duration of Insurance Coverage

Not exceeding 12 months

Financing Limit for Coverage

Up to 90%

Eligibility

Banks or financial institutions financing exporters

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