Exporters to get Dubai cover for defaulted pay
Employees sort and grade fresh bananas for the export market.
Kenyan fresh produce exporters and traders will gain access to Dubai’s export insurance provider to cover for losses where buyers default on already exported goods.
Etihad Credit Insurance (ECI) UAE Federal export credit company will offer local exporters up to $200,000 (Sh21 million) insurance for up to five months.
Fresh produce traders have been raising concerns and even blacklisted buyers over non-payment for orders prompting a Kenyan trade lobby to look for a way of unlocking the impasse.
The Kenya National Chamber of Commerce and Industry (KNNCI) President Richard Ngatia said the deal was brokered during a benchmark visit hosted by Etihad Credit Insurance chief executive Massimo Falcioniand. An MoU will soon be signed to formalise the commitment of both parties.
“We launched secure credit insurance against non-payment for exports or international sales transacted on open credit terms. Through ECI project financing investors will now be able to secure their foreign assets against non-commercial risks. As an underwriter, ECI has also undertaken to provide guarantee of payment for export goods in case of damage or loss,” Mr Ngatia said on Tuesday.
The most affected traders are those exporting avocado, which is a high-value crop with a container netting close to Sh4 million.
At the beginning of last year, Kenyan avocado exporters said they had lost about Sh200 million in already shipped consignments over non-payment.
Small-scale exporters of perishable goods especially avocado have been making huge losses following the rejection of their produce by some buyers over some stipulations with no reprieve.
Fresh Producers Consortium of Kenya (FPCK) says some companies order consignments but fail to clear outstanding amounts after making a down payment. They then move to the next exporter without clearing their debt.
Kenya is ranked 21st African exporter selling goods worth $361 million accounting for 1.3 percent of Africa’s total exports to the Middle East.
Tea is Kenya’s top export product to UAE ranked 13th accounting for 0.3 percent of Africa’s exports to UAE.
