E-Trade Finance as a competitiveness

enhancement for SME's in developing countries

Presentation to UNCTAD
Geneva, 22-24 October 2001

Geneva, 22-24 October 1

Cost and need for credit are higher for companies
in emerging markets

 poor information

 high perceived risk

 low credit management expertise in companies and banks

Geneva, 22-24 October 2

This is true for trade credit

 supplier credit (in intercompany trade) is the first source of funding for

a significant number of companies and countries

Geneva, 22-24 October 3

Consequences are very negative for companies
in emerging markets and for their national
economies

 higher cost for import

 lower value for export

 financial constraints for companies and economies

Geneva, 22-24 October 4

Internet could make it better
…or worse

 more information available at lower cost,

 more financial services available,

 but tomorrow … credit refusal can be “at a click”...

Geneva, 22-24 October 5

Coface enhances the credit of companies in
emerging markets, through ...

 its expertise on companies in emerging markets

 its tradition of shared expertise with institutions in emerging markets

 its innovative Solution

Geneva, 22-24 October 6

 Trade credit with SME's in emerging countries
can be protected

 Coface has pending trade credit risk on 220,000 companies in emerging

markets, most of them SME's (out of a total of 2.2 million)

 These covers represent $15 Bn turnover in emerging markets (out of a

total of $150 Bn)

 We have on line data on 1.2 million companies in emerging markets (out

of 41 million in our database)

 Our credo: there are good companies in every country

Geneva, 22-24 October 7

 Trade Credit management expertise can be
shared with institutions in emerging countries
 Coface shares its credit system with partners in 47 countries, a
majority being emerging countries

 Among our partners: national eximbanks or national credit insurers of

Algeria, Brazil, China, Czech Republic, Egypt, India, Kuwait, Morocco,
Malaysia, Oman, Poland, Romania, Singapore, Thaïland, Tunisia …

 All these institutions are linked through Internet to our "Common Risk
System", through a CreditAlliance

Geneva, 22-24 October 8

 The Solution

 is the first insurable company rating, rating 41 million companies

worldwide. It is the basis of 3 exclusive lines.

The @rating credit opinion on a company tells  Confidence in

if one can extend trade credit to this company commercial partners

@rating Protection covers the credit risk on a  Easier access to

company, up to its @rating credit opinion level credit

A company can certify its quality worldwide  Enhanced credit

through the @rating Quality Label.
Label worthiness

Geneva, 22-24 October 9

@rating solution is available on line

 Though 300+ @rating partners, in 80+ countries

 And via cofacerating.com

Geneva, 22-24 October 10

What is the credit opinion?

 It indicates on line to any interested party if one can safely extend

trade credit to a company and, if so, how much :

 1@, 2@, 3@, 4@ for recommended outstandings of 20 K€,

50 K€, 100 K€ or more

 or X if there is an element of weakness

Geneva, 22-24 October 11

 Quality Label: the only way to certify its
creditworthiness for an emerging market SME

You are a company, you have a contact with a new partner, a

prospective supplier or a customer; how can you tell him that you
deserve credit in a quick, understandable, free and reliable way? Just by
telling him, "my company deserves the Quality Label, which
you can check for free on cofacerating.com.”

Geneva, 22-24 October 12

 Trade Finance on line : how it works
Coface

Credit opinion

@rating protection,
single risk,
100%, on line,
CUSTOMER without recourse, worldwide VENDOR

Trade Finance on line

BANK

Geneva, 22-24 October 13

Some E-Commerce / E-Finance platforms with
"@rating inside" used by SME s in emerging
markets
 Trade Card, end to end foreign trade e-management (members in
Hong Kong, Korea, Taiwan…)

 Sino Pack, e-factoring (members in Saudi Arabia, Brazil, Romania…)

 VFM (Fruits) or Go Trade Sea Food (Fish), e-market places (members

in South Africa, Turkey, Hungary, Angola, Vietnam…)

Geneva, 22-24 October 14

Integrated Solution for factors - i.e. Bank SinoPac

Geneva, 22-24 October 15

Some projects under development

 Indian Eximbank Factoring JV

 IFC Securitization of Trade Finance for emerging markets exporters

Geneva, 22-24 October 16