Trade Hub signs MoU with ECIC
On June 13, the USAID Southern Africa Trade Hub (SATH) entered into a Memorandum of Understanding (MoU) with the Export Credit Insurance Corporation of South Africa Limited (ECIC).
In its capacity as the official export credit agency of South Africa, ECIC facilitates the provision of trade credit and investment within the Southern Africa (SADC) region. Inter-company credit is the main source of the world's commercial credit. In providing trade credit, suppliers afford their customers the ability to generate revenue before paying; however, in the process they assume the commercial and political risks of their customers and bear the additional costs of financing working capital for an extended period. Trade credit insurance not only shields suppliers from possible default by their customers, but it also allows suppliers to sell more goods on credit terms to customers, thereby increasing trade volumes.
In line with the SATH objective to enhance intra-regional trade through the increased usage of finance and insurance instruments, SATH engaged the ECIC in pursuance of increased volumes of trade credit insurance, especially credit insurance cover for agricultural equipment finance in the SADC region. As provided by the MOU, SATH and ECIC will cooperate through workshops, presentations, and an active exchange of information on trade and business prospects.
At the signing ceremony held in Pretoria, South Africa with SATH Chief of Party Robert Kirk, ECIC Chief Operating Officer, Mandisi Nkuhlu, remarked: 'We are very excited about the opportunity to cooperate (with SATH) to unlock trade and investment potential in pursuance of our mutual goals'.