LONDON – The Jeddah-based Islamic Corporation for the Insurance of Export Credit and Investment (ICIEC), the export credit and investment insurance agency of the Islamic Development Bank (IDB) Group, recently signed two agreements – one with National Commercial Bank (NCB) and the other with Packaging Solutions Factory Company. The agreement with NCB will enable Saudi exporters to obtain post-shipment financing covered by ICIEC insurance, Dr. Abdel Rahman Taha, CEO of ICIEC, told Saudi Gazette. Exporters will reassign their insured export receivables to the financing bank (NCB). In case of a default of payment in the receivables, ICIEC will compensate NCB up to 90 percent of the goods value, he said. The agreement with Packaging Solutions is for ICIEC's popular Comprehensive Short-Term Policy (CSTP), whereby ICIEC will cover Packaging Solution's exports to over eight countries as well as its domestic sales. The agreement, according to ICIEC, “will allow Packaging Solutions to explore new markets in the MENA region and in Europe, while ensuring that its balance sheet is protected against shocks by isolating the risk of non-payment. In fact, ICIEC has CSTPs in place with a growing number of Saudi entities including with Petro Rabigh, a leading petrochemical company based in Saudi Arabia. Dr. Taha said that currently there are 177 ICIEC policyholders mainly from the private sector in Saudi Arabia. ICIEC provides many services that meet the demand of SMEs. These services are provided in the shape of insurance policies to cover the SMEs risks in their international trade activities. “SMEs are the backbone of the economy in any developing economy,” he noted. SMEs make up 92 percent of the businesses in Saudi Arabia and employ over 80 percent of the workforce, according to the National US-Arab Chamber of Commerce's Tradeline. But Dr. Taha warns that “the main obstacles facing Saudi SMEs, like elsewhere, are their inability to secure adequate financing especially for their international trade activities as no one is willing to cover the associated commercial and political risks. This becomes the role of export credit insurance tools which enable banks to finance the credit receivables of SMEs without being exposed to external risks that they traditionally have not been able to assess.” “In order to mitigate the risks in our SME business, our approach is to have research done by using more than one source, buyer visits, strong trading and payment experience, and close monitoring,” he added.