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LCI hosts 9th Annual Partners & Reinsurers Meeting

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LCI held its 9th Annual Partners & Reinsurers Meeting in Beirut, on June 20 and 21, in the presence of local, regional and international guests. The meeting shed light on the strategic developments at LCI over the past year, and the plans for growth for the coming years.

Corporate reviews on LCI and LCI Services opened the meetings, followed by a series of presentations from partners, experts and new reinsurers, taking place throughout both days.

As an acting driving force of trade facilitation globally, LCI and its partner network continue to increase the spread of credit insurance on an international level, through joint efforts.

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Strengthening partnerships in Egypt

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LCI’s General Manager discusses innovation in trade receivables management

LCI took part in the official conference hosted by GIG Egypt and the Ministry of Trade and Industry in March, 2019. The aim of the conference is to strengthen investment and collaboration opportunities between Egypt and Syria. LCI’s General Manager, Karim Nasrallah, shed light on the innovation in trade receivables management, to drive trade globally.

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Digitization will impact the trade industry

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Every day, fleets of huge ships dock in ports over the world and every hour, a plane carrying cargo lands, in one country or another. With every docking and landing, a stack of paperwork will need to be processed. Whilst this practice has been the standard process adopted by governments and countries for decades, the cost of processing trade documents still remains high.

Based on figures released by the World Economic Forum, the cost of processing the paperwork for shipped goods, can reach as much as one fifth of the cost of shipping the actual goods. Many institutions, including banks and technology companies, are trying to streamline this process, as the benefits are numerous. Experts indicate that simplifying the administrative procedures can actually lead to notable growth in international trade.

Apps, technological innovation & block chain solutions are simplifying procedures of shipping goods.

In comes digitization, which is already underway in the trade sector. Apps, projects, technological innovation and even block chain solutions are simplifying the once complex administrative procedures of shipping goods. Electronic-based documentation lowers costs, simplifies workflow, and takes up less time in terms of analysis and storing. Depending on the electronic documents along with the use of standardized ID numbers for transactions, traders can benefit from a smoother process, expand to new markets and deal with new clients, with less requirements when it comes to due diligence, collecting and tracking credit, performance and commercial dispute data.

The advantages of digitizing the trade sector are clear, but will governments and private institutions move fast enough?

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LCI continues expansion in Africa, launching credit insurance program with ASKIA Assurances

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LCI Services officially launches credit insurance program with ASKIA Assurances in Senegal
LCI Services, the Lebanese Credit Insurer’s (LCI) servicing arm, has completed the implementation of tailored trade credit insurance products and services for companies in Africa, together with ASKIA Assurances in Senegal. The official launch brought together over 200 people and took place in Dakar, Senegal. The agreement entails the establishment of a partner operation in 7 African countries, to develop local markets and assist ASKIA Assurances in extending trade credit insurance coverage. It will also help protect businesses from growing commercial and political risks and in increase exports, to aid in the growth of the Senegalese private sector.

“As the first independent specialized trade credit insurer in the MENA region, we wanted to share our expertise and develop other regions when it comes to trade credit insurance,” said Karim Nasrallah, General Manager of LCI. “Trade credit insurance, credit information, debt collection and business development are vital elements to support local businesses in scaling up and expanding into new markets. We are confident that this move will boost the development of small and medium-sized enterprises in Senegal,” he added.

LCI Services offers comprehensive outsourcing solutions that include access to reinsurance, risk and commercial underwriting, debt collection, credit information, business development and IT support. These services will be offered to the 7 African countries, which include: Senegal, Ivory Coast, Niger, Burkina Faso, Guinea Bissau, Togo and Benin.

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LCI launches TAJER supporting SMEs, the main drivers of the MENA region’s economy

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TAJER: The simplified trade credit insurance policy helps support SMEs in their growth and expansion strategies

The Lebanese Credit Insurer (LCI) has launched TAJER, an innovative, simple and efficient credit insurance policy for Small and Medium-sized Enterprises (SMEs) operating across the MENA region, providing cover for their trade receivables. Utilizing LCI’s expansive market intelligence, including the active monitoring of 16,000 companies focusing on their payment behaviors, TAJER will aid SMEs in growing their businesses and ensuring they get paid for the goods and services they supply. 

“SMEs make up a major part of the MENA region’s economy, and in Lebanon, they comprise an estimated 80% of companies. Yet, only a small percentage of them are covered against the risks of non-payment,” said Karim Nasrallah, General Manager of LCI. “As such, we want to support them in their expansion into new markets and in growing their client portfolios. TAJER gives SMEs the confidence to look at new opportunities in their local markets and abroad, and focus on their growth,” he added.

The Middle East and North Africa (MENA) region has undergone a series of transformations in recent years, impacting the way businesses operate. LCI’s Risk Department market analysis shows that the risk of payment defaults is increasing, impacting the trade receivables of companies across the region. The highest risks in the market are impacting SMEs, rather than by bigger corporations, especially as they expand their market coverage and export to the different parts of the world – a move needed to optimize revenues and generate profits.

SMEs in Lebanon, as well as in most markets globally, employ the majority of the workforce, and play a major role in creating job opportunities. They are the institutions that fuel the economy. Lebanon is known to have one of the biggest densities of established business owners, not only in the MENA region, but even globally, based on official figures.

Seeing that there is a scarcity of available information (financial and other), the only way for credit insurers to underwrite risk is to conduct research via on-ground visits to companies, to understand, based on their sector experience, what is the potential opportunity and credit worthiness of each entity. Monitoring is also segmented by sector, trade size, company size and country location.

With TAJER, the straightforward and flexible insurance policy covering a company’s biggest asset, its trade receivables, many benefits will be offered which include:

  • Increase sales, by extending credit limits to existing clients and reconciling between the sales and risk departments
  • Manage risks, by accessing a large database of information and intelligence on thousands of companies
  • Be more competitive, by extending payment terms for new and existing clients
  • Protects against bad debt, by securing cash flow and optimizing financial planning
  • Achieve better borrowing from banks, turning trade receivables into good quality collaterals, allowing companies to negotiate better borrowing terms

 

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LCI takes part in the Berne Union AGM in Paris

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LCI took part in the Berne Union’s Annual General Meeting, held in Paris in October 2018. Karim Nasrallah, LCI’s General Manager, delivered a presentation on the topic of factoring, covering a case study on fraud detection and prevention.

Over 300 senior executives from the global export credit and investment insurance industry today gathered in Paris, for the 2018 (75th) Berne Union Annual General Meeting, hosted by French export credit agency and Berne Union member – Bpifrance.

Berne Union Members released their 2018 H1 Business Data
Half-year results show stable business for credit and investment insurers, despite the uncertain environment for international trade and investment.
• US$ 1,640 bn aggregate credit limits issued in support of cross border trade
• US$ 88 bn of new medium / long-term export credits insured
• US$ 18.6 bn cover provided for foreign investments

For more: www.berneunion.org

 

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[Blog] Ensure a profitable business in 7 ways

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Are you concerned with your business’ financial health? Do your clients pay late, or sometimes not at all? Here are 7 ways to avoid bad debt and ensure you’re running a healthy, profitable business.

Lower risk factors by setting clear payment terms and conditions

Set clear terms and conditions for your clients about payment procedures, timelines and deadlines. Integrate consequences for payment delays into your agreements.

Maintain constant contact with your clients

Always be in contact with your clients, especially when payments are overdue. Send them reminders and notify them in writing when a payment is overdue.

Understand and track your actions

Send invoices to the correct people, to ensure prompt processing.

Restrict credit limits

Run a background check on a client before doing business with them. This is a vital step. But once you sign them on, take time to understand their needs and challenges, before offering any credit facilities. Set strict credit facility terms.

Find out reasons for delays

Your client may have reasons for the delays, find out what they are. Your priority is to find an amicable solution to settle overdue payments.

Assign debt collectors or lawyers

When the matter is out of your control, there are debt collection agencies that can be tasked to secure outstanding payments for you. Even your lawyer can get involved, to send an official final reminder to your clients who haven’t paid, after numerous follow ups. Adding a third-party puts additional pressure on clients, to take matters seriously.

Be strict yet flexible at the same time

Of course, every client may go through cycles, and sometimes, they may default. Be strict with your payment policies, however sometimes you’ll need to be flexible with specific customers that you highly trust and have a positive history in payments.

Keep in mind that taking preventive measures to avoid late payments, is easier than collection. Always make sure you seek professional advice and understand your business’s situation before taking any decision. A profitable business requires close management, especially when it comes to trade receivables.

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[Blog] How is the ongoing trade war impacting the MENA region?

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The trade war between the US and China has been making global headlines in recent months. The headlines then turned into action, with the US implementing a 25% tariff on Chinese exports, worth billions of US Dollars. China responded with a similar approach – and the trade imbalance between the two countries became even more evident.

The world’s two largest economies found themselves in a trade war, which many economists say, will negatively impact the GDP of both countries and will slow trade growth in the long-term.

However, as the world watches on as the two nations battle it out publicly, some experts are analyzing the potential impact of the trade war, on the Middle East. When it comes to the MENA region, whilst the trade war seems like a distant battle, repercussions are already surfacing.

Countries in the MENA region may be forced to take sides, fueling the trade war further. In addition, as the US and China advance further into their battle, they may adopt a protectionist approach, to safeguard their country’s industries. This will lead to a decreased demand for goods from Middle Eastern markets, such as the oil exports from the region into China.

The full extend of the trade war between the US and China is yet to be seen and felt. Let’s hope that an amicable solution is found, before the trade industry is disrupted completely.

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LCI Expands its Debt Collection Services to 11 New Markets in Africa

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The servicing arm of the Lebanese Credit Insurer (LCI), LCI Services, has expanded its Debt Collection Services to cover 11 new African markets, which include Mauritania, Senegal, Gambia, Guinea Bissau, Guinea, Liberia, Ivory Cost, Ghana, Togo, Benin, Nigeria, Cameroon, Gabon, Congo, Democratic Republic of the Congo, Angola, Madagascar, Tanzania, Kenya and Sudan, in addition to existing markets which it covers.

“Businesses operating in the Middle East and Africa face recurrent difficulties in securing payments for the goods and services they supply. It is widely known that these regions achieve inadequate rankings when it comes to debt collection, and many businesses are suffering when writing off bad debt,” shared Karim Nasrallah, General Manager of LCI.  “With our expanded reach of debt collection services, we are supporting clients in their regional growth, and protecting their biggest asset – their trade receivables. The addition of these new markets will allow LCI to extend credit insurance cover in these markets in Africa,” he added.

Delays in payments are mainly due to lack of a proper payment behavior framework and a lenient payment culture in these markets, which leads to buyers defaulting and extending supplier credit limits for over 180 days. Debt collection is key for companies to recover outstanding balances. The Debt Collection Services offered include: recovery management, verbal negotiations, dunning letters, final demands, solicitor’s letters, drawing up repayment plans and legal action.

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LCI and SACE sign cooperation agreement

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LCI and SACE have signed a cooperation agreement, to enhance trade opportunities between Lebanon and Italy by supporting SMEs. The expertise and know-how of both entities will be extended to SMEs, along with training programs and technical assistance offered to financial institutions and commercial banks, as result of this agreement.

SMEs make up the majority of business institutions in both Italy and Lebanon, employing a large proportion of the national workforce. Thus, supporting their growth and enhancing trade opportunities, through trade credit insurance and the sharing of expertise, contributes towards a more prosperous economy.

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