There are many strong reasons for you as a bank or a finance company to become a member of KGFF. Credit insurance can create new capacity for different types of lending and working capital financing.
The Swedish Credit Insurance and Surety Association (KGFF) includes EKN, private credit insurance companies, brokers, banks and other relevant persons/companies in an association whose purpose is to spread knowledge and information about the value of credit insurance for Swedish trade and export.
Credit insurance, insures payment defaults and reduces the risk in factoring and other types of business financing, the receivables that act as security may be insured against possible credit losses. Companies’ receivables often represent more than 1/3 of the total asset base. Credit insurance could improve security of financing contracts.
Find new capacity and relieve current exposure through increased security in receivables.
Swedish banks and EKN have collaborated with financing of long term export credits for a long time.
It is not always understood within the Swedish Trade Finance sector that the same structure is possible for short credits within Sweden and all export markets, this opens up to new possibilities for business.
In today’s advanced businesses, Supply Chain Financing is an important tool to create effective and competitive value chains. On a practical note there are connections between finance and credit insurance:
- Credit insurance of receivables increases security for financing, which may support an increase in available finance or decrease cost of finance.
- Credit insurance supporting financing can help companies to improve ratios such as equity ratio and return on capital employed.
Credit insurance can play a critical role in supporting capital adequacy and risk management solutions. Credit insurance is subject to the solvency rules, including Basel III and other prudential regulation for capital requirements.
KGFF’s objective is to develop the understanding of credit insurance in relation to trade, industry and state. As a member of KGFF, we invite you to participate in this interesting development.
KGFF hopes that you, as members of the organization, help us to develop the Swedish trade finance sector.