By John Oyuke
Small and medium sized enterprises (SMEs) may be in for a treat as the African Trade Insurance Agency (ATI) contemplates launching a new product that would help them access financing, in a bid to counter the negative impacts of global credit crunch.
The incoming Chief Executive, Mr George Otieno, said the insurance product would allow specific banks to accept ATI insurance cover as collateral for financing, and relieve SMEs of the burden of putting up large amounts of cash or goods in order to obtain loans.
"This product will also allow banks lend more money," he said at a media briefing in Nairobi yesterday.
Otieno said although the global financial crisis might have eased, the business people who run SMEs in the region are still reeling from the after shocks.
Chief Underwriting Officer, Stewart Kinloch said ATI’s main lines of business grew by more than 80 per cent, and the first quarter of this year indicates prospects for even better performance.
The continent’s only multilateral trade and political risk insurer’s first quarter results show an increase in demand, with inquiries worth $1.6 billion in the last three months alone. He also announced new initiatives to shore up internal capacity to help ATI meet its clients’ demands.
The first, would be an electronic underwriting system, to be implemented by the end of the year, which would halve the turnaround time taken to underwrite policies.
The Agency is also launching a study to determine its development impact on trade and investment inflows into Africa, since it was launched in 2001. The study, which will be released next year, will also be used to determine the market gaps in a post-financial-crisis environment, as well as identify new insurance products to fill identified gaps.