risk mitigation: africa’s key to unlocking investment & global competitiveness in the grain...
TRANSCRIPT
Risk Mitigation: Africa’s Key to Unlocking Investment & Global
Competitiveness in the Grain Trade
Souvik Banerjea, Sr. Marketing Officer
Presentation to the Grain Trade Summit
1 October, 2013
Mombasa, Kenya
How does risk come into the picture?
Global Trends
● Agriculture represents app. 60% of most African economies and a large percentage of SMEs.
● Banks are more risk averse tightening lending requirements which largely impacts SMEs
● World Bank estimates that 30 – 37 million SMEs are financially underserved representing a credit financing gap of between $140 – 170 billion
What Our Clients Tell Us: Current Challenges in the Agricultural Sector
Z$1
.9 m
1. No access to loans
2. No access to $$ from foreign investors & governments unable to offer credit facilities
3. Challenges expanding into new markets● Banks and clients require supplier credit● High risk that your debtor may default● Access to credit information on potential buyers● Currency exchange and transfer issues
How Can We Help?
“We provide the safety net”
Trade Credit Insurance
Z$1
.9 m
A practical definition:
Credit Insurance covers SUPPLIERS against the non-payment risks of their accounts receivables with local and foreign customers (BUYERS).
Trade Credit Insurance Benefits
● You can become more competitive: Your supplier can be insured against your non-payment risk so that you can do business on credit terms
● It frees up your money: Trade Credit Insurance is a cheaper alternative to Letters of Credit
● The option of covering one buyer or all your buyers: We can cover a tender or your entire turnover
● Banks can use the policy as collateral: This provides access to $$
● We provide access to credit information on your buyers
Client: A vegetable wholesalerCountry: KenyaInsured Turnover: $2–10 mln
Transaction Details:Client Motivation – to avoid losses to buyers in Europe & Middle East and to get assistance with debt collection.
Recent ProjectsAgricultural Exports
Client: A regional bankCountry: Southern AfricaInsured Amount: $40 mln
Transaction Details:Client Motivation – The bank set up a grain purchasing facility for a govt. agency enabling them to buy grain directly from farmers.
Recent ProjectsGrain Purchasing
Facility
Our Products
$3.1
m
Z$1
.9 m
$1.3
Rw
and
a$1
.1
Ken
ya$7
49
Ug
and
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49
Bu
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$130
Mad
agas
car
Protects investors against financial losses in the event of a political or terrorist-motivated event
Protects against any unfair action or inaction by a government that would negatively affect your business or investments
Non-payment or delayed payment by a private, sovereign or sub-sovereign buyer
1. Bid
2. Advance
payment
3. Performance
4. Customs &
Warehousing
Political Violence, Terrorism & Sabotage Insurance
Political Risk Insurance
Trade Credit Insurance
ATI can offer a combination of all products for comprehensive coverage as well as co-insurance or reinsurance on specific products.
Surety Bonds
Political Risk Insurance
Covered Risks● Transfer Restriction
● War and Civil War (Business interruption or Physical damage)
● Embargo
● Expropriation (includes Confiscation, Deprivation, Nationalisation, Forced Abandonment, Selective Taxation, Unilateral Cancellation of Contracts/Licenses, Backtracking on Investment Incentives
● Unfair Calling of Bonds
● Sovereign/Sub-Sovereign Non-payment
● Non-honouring of Sovereign Guarantees
Feedback from Clients
“Because of ATI, my business was able to….”
Why ATI?
● “Financially Sound” – over $156 million capital● “Trusted” – an S&P rating of ‘A/Stable’ since 2008.
Highest rated insurer and the second highest rated institution in Africa
● “International partners” – we regularly partner with international insurers and financial institutions
● “Proven track record” – we have facilitated over $10 billion in trade and investments in our African member countries
● “Recognition” – AI (Africa Investor magazine) gave ATI the award for best export credit agency for two consecutive years (2011 & 12)
ATI HeadquartersKenya-Re Towers | Upperhill, Nairobi
My ContactsSouvik Banerjea
Tel: +254 20 272 [email protected]
Our Websitewww.ati-aca.org
ATI ContactsAfrica’s Export Credit Agency
www.ati-aca.org
ATI HeadquartersKenya-Re Towers | Upperhill, Nairobi
ATI Rwanda OfficeGround Floor, Prester House | Boulevard de
l’Umuganda | Kacyiru , [email protected]
ATI Tanzania Office1st Floor, Private Sector Hs | Mwaya Road
Dar es [email protected]
ATI Uganda OfficeWorkers House, 9th Floor Southern Wing |
Plot 1 Pilkington Road | Kampala [email protected]
ATI Zambia OfficeKwacha House Annex, Cairo Road, Lusaka,
ATI Contacts
www.ati-aca.org
Questions?