Improving the SMEs Access to Trade Finance DRAFT
in the OIC Member States
34
more closely linked dynamic between these two dimensions of international engagement
(Integrative Trade, EDC and Conference Board of Canada). The notion is that companies
engaged in export trade are now often also importers due to the need to sources inputs to
production, and that companies engaging in trade activity are increasingly likely to become
investors in the markets in which they trade. This view, referred to as “Integrative Trade” has
seen some exposure in academic circles as well as among practitioners.
Figure 11: Trade Finance and Investment Insurance
Source: ICIEC 2013
The offerings of ICIEC are both comprehensive and strategically defined, and provide a clear
complement to the value proposition of the ITFC, while encompassing international activities
(trade and investment) that are both complementary and directly linked to the broader
objectives of OIC Member States.
The differentiated focus of ICIEC on Shari’ah compliant products and solutions is notable
however, it is also clear that the ICIEC is actively working to develop partnerships, alliances
and collaborations with selected partners, including Canada’s EDC.
b. Export Credit Agencies (ECAs)
In addition to the critical contributions of international financial institutions, particularly in
the context of ongoing crisis and economic challenge, the role of export credit and insurance
agencies has also been shown to be of critical importance in responding to the trade financing
needs of companies of all sizes.
Export credit agencies (ECA) were originally public sector entities mandated to enable
economic recovery through support for export trade. ECAs provided financing and various
forms of guarantees, insurance and other forms of risk mitigation, linked directly to the export
aspirations of their sponsoring national governments.
Banks
Investors
ECAs
Suppliers
CreditInsurance
Political Risk
Insurance
Trade Credit
Insurance
Reinsurance
Foreign Investment Insurance :
• Equity Investments
•Non Equity Investments
Inward Reinsurance :
•Quota Share Treaty
•Facultative Reinsurance
•Excess of Loss Treaty
Trade Finance and Investment Insurance
• Bank Master Policy
•Documentary Credit Policy
•Loss Payee Assignment for CSTP/STP
•PRI for Financing Facilities
•Non-Honoring of Sovereign Financial Obligations