Omega Ukama 
Zimnat General Insurance managing director Stanley Mazorodze
A CONFERENCE on collaboration and sharing ideas in utilising trade credit insurance to promote international and local trade was held last week.
Trade credit insurance protects traders who supply goods or services on credit against the risk of payment default.
The conference was organised by a recently established division of Zimnat, which is a stand-alone entity, to “help promote trade in the new economic environment” through trade credit insurance. The division offers this for both local and foreign trade. It also offers surety bonds and guarantees.
“We realised that if there is to be increased trade, particularly with respect to exports, there is need to offer traders security against the risk of non-payment by those to whom they supply their goods and services,” Zimnat General Insurance managing director Stanley Mazorodze said.
The conference was intended to promote a better understanding of trade credit insurance and to highlight the critical role that trade finance can play in resuscitating the economy.
“It is hoped that it will encourage synergies between stakeholders involved in trade, finance and credit in promoting Zimbabwe’s local, regional and international trade,” he added.
Risks in trade credit include bankruptcy, payment default and payment delays. The vast majority of trade transactions across the world, estimated at around 80 to 85 percent, are conducted on “open account” terms, relying on the relationship with the purchaser, supported by a purchase order and invoice with mutually agreed payment terms. This percentage is, however, much less in African markets, including Zimbabwe, making trade credit riskier.
Zimnat Trade Credit Insurance, Bonds and Guarantees Division general manager Shepherd Tembo said it was important for the benefits of trade credit insurance to be fully understood and made use of so that local companies can export to international markets knowing that the risk of non-payment is offset by insurance cover.
Since the resignation of Robert Mugabe in November last year, there has been a rejuvenation of prospects for increased investment and trade between Zimbabwean companies and the rest of the world, with the new administration claiming to have received more than $10 billion in commitments.
newsdesk@fingaz.co,zw
