European Commission approves Credendo’s initiatives to support Belgian economy
- The European Commission has approved the support measures for the Belgian economy set up by Credendo
- The new financial guarantee, the ‘Credendo Bridge Guarantee’, was given the green light by the European Commission
- The reinsurance programme allowing private credit insurers to continue to fulfil their roles despite the covid-19 crisis has also been endorsed by the Commission
Approved by the European Commission
The Belgian economy is one of the most open economies in the world and its exports represent over 85% of the Belgian GDP. Therefore, it is crucial to support internationally active Belgian enterprises during the covid-19 crisis.
In this context, Credendo – the Belgian export credit agency – launched new initiatives in order to ensure that enterprises continue to have access to bank credit and credit insurance in these difficult times. The European authorities have just approved these two support measures in favour of the Belgian economy and internationally active enterprises.
‘Credendo Bridge Guarantee’
Besides credit insurance, insurance for investments abroad and direct financing, Credendo also offers financial guarantees to banks granting credit to enterprises that are active abroad. Credendo is now offering a new financial guarantee, the ‘Credendo Bridge Guarantee’.
“The Credendo Bridge Guarantee aims at ensuring that enterprises, and SMEs in particular, can obtain the necessary bank credit in these challenging times,” states Dirk Terweduwe, CEO of Credendo. “We guarantee up to 80% of bridging loans for a maximum duration of one year and a maximum amount of 10 million euros per enterprise.” Thanks to this guarantee, internationally active enterprises can obtain credit more easily, and credit amounts can be higher, while the bank granting the credit facility will have a larger capacity and more comfort.
The other component of the support programme for the Belgian economy approved by the European Commission concerns the establishment of a reinsurance programme enabling private credit insurers to continue to fulfil their roles despite the covid-19 crisis. “Credendo, acting on behalf of the State, will act as reinsurer,” specifies Dirk Terweduwe.
The credit insurance sector is vital for companies and trade in Belgium and Europe. Commercial companies generally grant payment terms of 30 to 90 or even 180 days to their (business) customers. The role of credit insurers is to secure inter-company commercial transactions and to indemnify their insured in case of non-payment of the invoices by the insured’s clients. In that context, credit insurers grant credit limits which they agree to cover for a specific customer of their insured.
Under this reinsurance programme, the credit insurers undertake to keep the credit limits that were actually used in the 12 months preceding 1 March 2020 – representing a total amount of over 57 billion euros – as intact as possible until the end of 2020. In this way, commercial relations and trade flows can be maintained. In exchange for this commitment, Credendo – Export Credit Agency, acting on behalf of the State, undertakes to reinsure the risks underwritten by the credit insurers located in Belgium.
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Credendo is present all over Europe and is active in all segments of trade credit insurance, offering a range of products that cover risks worldwide: Belgian export credit agency services, comprehensive credit insurance covering short-term risks in and outside Europe, single risk, excess of loss, top-up cover, surety bonds and reinsurance. In 2019, Credendo insured global business transactions worth almost €85 billion and earned premiums totalling €314.9 million. Credendo is Europe’s fourth largest credit insurance group.
For more information, visit www.credendo.com