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The value of trade facilitated by DP World’s financing arm and guaranteed by Etihad Credit Insurance (ECI) has exceeded AED1bn (US$272mn) in little over a year, the duo have announced. 

The UAE export credit agency last year forged a partnership with DP World Trade Finance – a fintech platform launched by the logistics giant in October 2021 – with the aim of bringing trade finance to SMEs and helping diversify the UAE’s economy away from oil. 

In a joint announcement on February 20, DP World and ECI say transactions include exports of agri-commodities, chemicals, manufacturing and construction materials, with a “significant portion” originating from smaller companies. 

Speaking at the GTR Mena event in Dubai, DP World Trade Finance board director Raj Jit Singh Wallia said: “50% of global trade involves an SME, but only 10% of global trade finance gets to an SME. That gap is about a US$2.5tn gap. So when we look at the SME sector, there is a lot more we can do.” 

DP World is now aiming to reach US$1bn in ECI-insured trade finance by the end of next year, Singh tells GTR on the sidelines of the conference. The partnership aims to broaden SME access to trade finance by mitigating the potential risks that can cause large financial institutions to steer clear. 

Singh says that because DP World has end-to-end oversight of the physical movement of goods, coupled with long-standing customer relationships, it is uniquely positioned to avoid fraud – such as duplicate invoice financing – as well as other risks like money laundering. 

“It comes down to the data, we have that the banks don’t have,” he says.  

“For example, if you think about an SME client based in Jebel Ali for the last 15 years, we know whether that entity has had financial issues, what goods they store, how they have sustained economic cycles, and so on. 

“We also have information operationally, for instance as the logistics provider for their shipments.  Banks are relying on documentation, but we have first-hand information that can mitigate those two big risks: collusion and fraud.” 

Through the partnership, ECI – which started operations in 2018 as the UAE’s federal export credit agency – provides non-payment and geopolitical risk cover for those transactions. 

“On top of that due diligence, we do our own risk assessment in terms of the markets these goods are going to, and what type of goods they are,” ECI’s chief executive Raja Al Mazrouei tells GTR. “That gives both entities a common criteria to facilitate the transaction.” 

The announcement comes as the UAE’s non-oil foreign trade volumes surpass AED3.5tn (US$953bn) for the first time in its history. 

Next on ECI’s agenda is to boost exports to three key markets – India, Turkey and Indonesia – Al Mazrouei says. 

“We saw huge growth in Turkish trade transactions in 2023, and when you look at the top imports of those three countries, they match the top 10 exports from the UAE,” she says. “By guaranteeing against risk, we can help create big market opportunities for UAE companies.” 

Singh adds that from DP World’s perspective, risk in many emerging economies is often mispriced. 

“We have been in these markets for a long time, and believe these borrowers can and should borrow at a much lower rate,” he says.