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Experts Call for Effective Management and Mitigation of Unpaid Credit

“An increasing number of companies across the world are facing the inevitable risks of defaulted or unpaid credit and in the Middle East businesses can no longer afford to sidestep the issue, especially in times of the global downturn,” said experts during a seminar titled: Credit Insurance.

The event, organised by Millennium Insurance Brokers Company, examined different angles and strategies for protecting the bottom-lines of companies with regard to managing credit risk.

The panelists presented the insurance carrier, broker, legal, and banking angles of credit risk.

Albert Rodrigues, managing director, Millennium Insurance, said: “Credit risk is not something that impacts financial organisations exclusively but all companies are exposed to it.”

“With the recession, it has become all that important for companies around the world to re-look at their credit strategies in order to remain 
profitable,” he added.

Rodrigues explained that objective of holding such interactive events was to learn from the collective experiences of leaders in the field, and provide a better understanding of how they have managed to mitigate risk through the combination of business processes 
and technologies.

Euler Hermes, Regional Manager, Anil Berry, pointed out that how companies can turn operational risks into opportunities when the risks are effectively managed.

“The restructuring of credit policies at financial institutions in the Middle East shows that credit risk management issues are gaining more importance,” he said and added: “Many companies are increasingly recognising the benefits of total credit insurance to safeguard themselves against such risks.”

Trade receivables, goods sold and services rendered, are an asset of the company and it deserves protection, especially in times of the global downturn, said Berry.

Euler Hermes Credit Insurance is wholly-owned by the Euler Hermes Group, the market leader in 
credit insurance.

The company is in business for the last 110 years and has 36 per cent world market share.

The company with presence in 50 countries monitors 40 million companies’ risk databases and protect €800 billion of business transactions worldwide.

“An effective management and mitigation of credit risks will improve cash flow, allow businesses to focus on sales effort, secure business growth, ensure trade finance, inculcate disciplined payment terms besides being able to sustain during the global downturn,” explained Murad Abida, partner at Hadef Al Dhahiri Associates, one of the leading legal organisations dealing with credit risk cases.

abdulbasit@khaleejtimes.com