ECI Introduces UAE Trade Finance Gateway To Simplify Credit Access To SMEs
The latest reports say, Etihad Credit Insurance (ECI), the UAE Federal export credit organization has agreed with First Abu Dhabi Bank (FAB) & Crediti Fintech to further introduce the “UAE Trade Finance Gateway”.
This “Trade Finance Gateway” platform targets simplifying the access to finance for UAE exporters and re-exporters. Plus, it also aims to accelerate the growth of SMEs, thus, empowering them to contribute to the UAE’s industrial strategy ‘Operation 300bn’
The project, which is upheld by the UAE Ministry of Economy, to highlight the Public-Private Partnership approach, will help ECI to position itself as the crucial gateway of exporters and re-exporters to trade credit and financing solutions that will be facilitated by commercial banks and financial institutions, whereby Monimove fintech platform is an essential technology provider.
FAB is the first commercial bank to participate in this initiative and several others are expected to follow, showcasing the strength of the UAE banking system in the country, capable enough of handling the essential financial requirements of the companies.
An on-time availability of finance is critical for smooth operations of trade globally. As per World Trade Organization (WTO) report, “Trade Finance and SMEs”, up to 80% of global trade is upheld by some type of financing or credit insurance. However, as per the report, there are noticeable gaps in provision and therefore, several organizations are unable to access the required trade finance instruments. This lack of trade finance leads to missed growth & development opportunities, as stated by WTO. Companies don’t have the required fuel to gear up their trade activities, especially small & medium-sized enterprises experience great hurdles in accessing funding on reasonable terms. As per the WTO report, SMEs are a leading driver of trade, job opportunities, and economic growth.
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“The project will help resolve a lot of difficulties being experienced by exporters and re-exporters in achieving finance to back their working capital requirements, such as confined availability of finance to smaller firms, hefty and unclear procedures to get finance, the inability of clients to understand suitable products or solutions, lack of infrastructure to run digitized documentation, and prolonged & lengthy process.” As per Massimo Falcioni, CEO of Etihad Credit Insurance.
He further added, “The ‘UAE Trade Finance Gateway’, which is among the UAE’s 50 projects to strengthen the economy, demonstrates the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai. His Highness explained that the UAE’s non-oil trade yearly surpasses Dh1.5 trillion and our logistics network is in 400 global cities. UAE's non-oil economy highlights over 70 percent of our GDP. His Highness also clearly said that our agenda is to extend our national exports by 50% in upcoming years. We are essentially committed to operating as one team, federally and locally, to boost our economy.”
This association of banks will be advantageous for exporters and re-exporters to get seamless & quick access to financing solutions accumulating the insurer, banks, and exporters in one unified platform. ECI Insurance Cover will help export SMEs to achieve loans against collaterals from FAB utilizing the advanced technology of the MoniMove platform.
SMEs will be benefiting from an end-to-end digitized process enhancing uninterrupted coordination between all parties and gearing up access to financing products.
“FAB has been serving as a bridge for quite a long time for trade and investment operations between the UAE and international markets, by facilitating trade finance for some of the nation’s largest exporters. This advanced association with ECI and Crediti Fintech will help us boost our expertise to a growing scope of UAE firms, providing essential support to exporters of all sizes. The aforesaid platform will utilize the technology, data, and customer relationships to enhance the development scope of the nation’s SMEs, start-ups, and pioneers, and aid the UAE’s agenda for a feasible and diversified future economy.” Explained Shireesh Bhide, Head of Corporate, Commercial, and International Banking at FAB.
Meanwhile, Mr. Hashim Al Hussaini, Crediti CEO & MoniMove Co-Founder, explained, “This pioneering step will boost the process of resolving SMEs’ financial difficulties. We are proud to be stepping forward in the same direction with two leading entities in the country. This MoU highlights our commitment towards facilitating the next generation of credit use, supply chain, and trade finance solutions.”
“We are glad to be a part of this unique step. We are quite confident that by getting together, we will contribute to the country’s vision and the growth of the national economy. ” As per Mr. Ali Al Mulla, GLH Chairman, and Crediti board member.
Additionally, the UAE Trade Finance Gateway will boost exporters’ capability to operate business internationally and help them in several aspects, such as accessing new cross border markets, counterparty liquidation protection, aid in cash flow, decrease in concentration risk, as well as providing local and international bank financing and portfolio monitoring.