Allied Irish Banks, p.l.c, (AIB) today announced an agreement with global trade credit insurance leader Euler Hermes to support the exporting ambitions of Irish Small and Medium Enterprises (SMEs). Euler Hermes has launched a new export credit insurance product in the Ireland called Simplicity. A first on the local market, it is available to SMEs who bank with AIB and who are exporting or considering exporting goods and services.
Simplicity is specifically designed to minimise administration to enable exporting SMEs to focus their attention on developing sales more effectively and securely to more markets at a reasonable cost. SMEs that have export credit insurance in place should find it easier to obtain funding as the insurance provides greater certainty that these invoices will be paid.1
“This is an important initiative for AIB. It further reinforces our commitment to supporting exporting SMEs” said Bernard Byrne, AIB’s Director of Retail and Business Banking. “The Euler Hermes partnership should provide better support for AIB customers already exporting or planning to export. The export credit insurance products will also enable AIB to provide additional working capital and other trade finance product support to our customers expanding into new markets.”
AIB IPSOS/ MRBI research conducted in 2014 highlighted that two of the key challenges for SME exporters were securing payment on time and minimising bad debts. These findings were supported by the Export Ireland Survey which found that in the area of “credit management and payment issues’’ only 28 per cent of Irish exporters use credit insurance, while over 47 per cent incurred bad debts in the previous year.2
“The rapid export sales growth by small and medium businesses in recent years has also brought them into greater risk of debtor payment default, which puts their businesses at risk,” said Gerard van Kaathoven, CEO Euler Hermes UK & Ireland. “Very few exporters cover their export sales risk due with credit insurance as they believe it is complex and involves red tape. The Simplicity product should provide a credit insurance scheme to exporting SMEs that is easy to understand, with minimal administration, no credit limits and an entry debtor book coverage of 60% at a very low cost. We are delighted to enter into this partnership with AIB to lend our expertise, knowledge and business protection services to help support and encourage Ireland SMEs to develop overseas opportunities.”
“The Euler Hermes partnership supports the bank’s Export Finance Strategy which we have been rolling out to SMEs over the last 12 months,” added Ken Burke, AIB’s Head of Business Banking. “The Euler Hermes partnership builds on a number of initiatives launched in 2014 to support exporting SMEs, including our discount agreement with DHL and our investment in our front line, where we appointed 85 Export Finance Champions across our network, to support SMEs exporting or looking to export.” 3
Notes to Editors:
1. How the Simplicity Product Works:
Simplicity is an “off the shelf” credit insurance policy that, for a fixed cost, can immediately start protecting a company against the threat of bad debts. With minimal administration, it is simple to use and offers a minimum of 60% cover, enabling companies to grow their export business, safe in the knowledge that they are covered.
2. The Export Ireland Survey & International Trade Finance Review 2014 was conducted by the Irish Exporters Association and Grant Thornton.
3. AIB’s partnership with Euler Hermes follows:
- The launch of the €200m AIB Export Finance Fund
- A partnership with DHL Express Ireland during 2014 whereby exporting SME customers can also benefit from a 50 per cent discount with DHL Express.
- The engagement of John Whelan (ex-CEO of IEA) in January 2014 as AIB’s sector specialist and advisor
- Appointment of 85 AIB Export Finance Champions across AIB’s network to support exporting SMEs
- Launch of in-depth research on the sector and the AIB Exports Outlook report in June 2014