Overcoming The Risk Of Failure To Pay, The Government Presents The Trade Credit Insurance Scheme To Exporters

Illustration of MSMEs (Photo: Doc. Ministry of Finance)

JAKARTA - The government through the Indonesian Export Financing Agency (LPEI) or Indonesia Eximbank is committed to continuing to encourage business development of business actors, especially those oriented to foreign trade.

LPEI Head of Guarantee and Insurance Salomi Adriana said In export transactions, payment failure was a concern for business actors.

This risk often haunts novice exporters who do not know the foreign market well. With massive economic instability, the potential for the emergence of risk of payment is increasingly sticking out," he said in a written statement on Friday, March 31.

According to Salomi, this situation requires a protection scheme that can provide important solutions for exporters. Therefore, Salomi stated that LPEI as the Ministry of Finance's Special Mission Vehicle (SMV) provides insurance services to business actors as a tangible manifestation of encouraging exports at the national level.

"Exporters can take advantage of Trade Credit Insurance services, protection and compensation guarantees for payment failures that occur due to commercial risks and political risks," he said.

Salomi explained, through the principle of risk sharing, Trade Credit Insurance insurance by LPEI can provide compensation when the buyer does not pay after 120 days due with an amount of up to 90 percent of the total loss value.

"This insurance is here as a form of LPEI support for business actors to be more courageous and confident in exporting," he said.

He claims business actors can now be more calm in facing the risk of payment when flying their products to world storefronts.

"Exportors must also strengthen mitigation sides, such as the clarity of trade documents, the selection of payment schemes, to know very well the profiling of product buyers abroad," he concluded.