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Suppliers’ Credit Insurance (c- Factoring & Invoice Discounting Insurance)

Suppliers’ Credit Insurance (c- Factoring & Invoice Discounting Insurance)
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​The lending bank or financial institutions obtains an insurance policy from Saudi EXIM bank and provides financing to the exporter against their export receivables. If the importer defaults, the lending bank or financial institutions will first attempt to recover from the exporter if the financing is with recourse. If the exporter also defaults, the bank or financial institutions can file a claim directly with Saudi EXIM bank, which will compensate the bank or financial institutions for the loss.

Properties
Product Method

1- The lending bank enters into an insurance policy contract with Saudi EXIM and pays the insurance premium.
2- The exporter assigns their receivables for export contracts to the lending bank, and the bank liquidates those receivables in favor of the exporter. In case the importer fails to pay, the lending bank will attempt to recover from the exporter (in case of financing with recourse) and then files a claim to Saudi EXIM.
3- Or directly files a claim to Saudi EXIM (in case of financing without recourse), which will indemnify the lending bank for the loss.
4- Saudi EXIM recovers the amount from the exporter or importer and returns a share to the lending  bank according to their risk-bearing ratio after deducting fees and legal costs.

Product Advantages

- Assisting banks and financial institutions in structuring credit facilities for Saudi exports.
- Providing protection for the insured against credit risks.
- Facilitating exporters' access to credit facilities.
- Reducing costs for Saudi exporters.
- Enhancing export volume and competitiveness.
- Exchanging credit and financial information.

The Sectors Eligible to Benefit from The Product

All sectors except crude oil

Duration of Insurance Coverage

Not exceeding 15 years

Financing Limit for Coverage

Up to 90%

Eligibility

​Banks or financial institutions financing exporters​


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