GOVERNMENT has injected $10 million into the Export Credit Guarantee Corporation of Zimbabwe (ECGC) in a bid to promote the growth and diversification of the country’s export trade, an official has said.
BY MTHANDAZO NYONI
ECGC is an export credit agency (ECA) wholly owned by the Reserve Bank of Zimbabwe (RBZ).
It is mandated with the promotion of the country’s export trade through the provision of financial services that address the needs of this sector.
ECGC Zimbabwe head of operations Andrew Mafukidze told NewsDay in emailed responses that the trade-support institution was fully geared to develop Zimbabwe’s export trade.
“Yes, we are fully capitalised in excess of the minimum requirements of $2,5 million set by the insurance regulator. We are also pleased to announce that the shareholder recently injected a further $10 million into the company as capital, which will go a long way in enhancing our underwriting capacity,” Mafukidze said.
Mafukidze said they had in place their export payments insurance policy, which is a versatile insurance programme offering insurance cover to exporters against a wide spectrum of commercial and political risks.
“The cover offered by the policy will protect exporters from non-payment for their goods arising from unpredictable payment risks inherent in export transactions,” he said.
The trade-support institution provides credit insurance and guarantee services that enable exporters to manage payment-related risks and obtain sufficient credit from banks for export orders that exceed the limit of collateral security available to them.
It also offers a level playing field for Zimbabwean exporters and enhances their competitiveness in export markets.
Banks make use of the guarantee scheme to manage their lending risk to exporters, whilst the insurance product enables exporters to manage buyer/payment risk. This allows them to increase their exports by developing new markets and diversifying their customer base.
Mafukidze said the state of the economy, characterised by low capacity utilisation, use of old machinery and high production costs, especially in the manufacturing sector tended to limit the level of support to exporters.
“ECGC sees many opportunities in enabling export growth, thereby contributing to the overall growth of the economy through availing its services to exporters,” he said.
“The scheme has been well received by the financial institutions.”
ECGC recently launched the Credit Guarantee Scheme to enable exporters access finance to improve their export performance.