Export Insurance and Credit Agency employs 42 people.

Administrative Board

Ljiljana Trgovčević, President
Danijel Nikolić, Vice President
Julijana Vučković, Member
Dejan Jokić, Member
Jadranka Zenić-Zeljković, Member

Executive Board

Milanko Bogosavljević, President
Danijela Piljak, Member
Dimitrije Stamenović, Member

• How to make decision on cooperation with a new buyer / supplier;
• What changes took place involving the existing partners;
• Financial standing of the companies world wide

Information on the financial standing enable defining of sale or procurement terms corresponding to the financial position of the business partner, or even making decision on giving up on the cooperation if the partner is insolvent or has poor payment history. If the buyer / supplier is eligible for cooperation, we shall propose a credit limit that the Exporter should set for the buyer / supplier corresponding to the highest risk degree that AOFI would accept in respect to that  Exporter’s partner.

Types of guarantees issued by AOFI:

1. Bid guarantees,
2. Performance guarantees,
3. Advance payment guarantees,
4. Retention money guarantees and
5. Maintenance guarantee.

The AOFI issues guarantees at request and at the order of domestic legal entities and         entrepreneurs who in the past year had export in excess of EUR 300,000.00, under the following conditions:

• Amount up to EUR 2,000,000.00;
• Commission from 0.25% to 0.50% on the guaranteed or secured amount to be paid quarterly in advance
• Single fee for the application processing: from 0,5% to 1% on the guaranteed or secured amount.

General Mandatory Requirements

• Export in the value of not less than EUR300,000.00 realized in the past year or other adequate proportional amount realized in the current year up to the moment of application submission and possession of the export deal contract to the value of not less than EUR300,000.00 in the current year;
• Positive net result of the business operations in the foregoing year;

Special Mandatory Requirements

• Positive evaluation of the Applicant’s financial standing;
• Positive evaluation of Exporter’s references and experience for realization of similar projects;
• Positive evaluation of the profitability of the export project for which a guarantee is requested;
• Positive evaluation of the quality – safety of the security means.

• Direct financing,
• Co-financing with the Exporter’s commercial bank,
• Loan refinancing through the Exporter’s commercial bank.

DIRECT SHORT TERM FINANCING OF THE EXPORTER

AOFI grants short term loans to export companies that in the past year had export in excess of EUR300,000.00 under the following conditions:

• Dinar equivalent value of an amount ranging from EUR 30,000.00 to EUR 2,000,000.00;
• Repayment period from 6 months to one year;
• Interest rate:
  • 3 % annually (for export value over EUR 10 million);
  • 4 % annually (for export value EUR from 5 to 10 million);
  • 5 % annually (for export value up to EUR 5 million);

Single fee for application processing: 0.7 % of the total loan amount.

General Mandatory Requirements

• Concluded contract on foreign trade deal with a foreign buyer;
• Export in the value of not less than EUR300,000.00 realized in the past year or other adequate proportional amount realized in the current year up to the moment of application submission and possession of the export deal contract having the value of not less than EUR300,000.00 in the current year;
• Positive net result of the business operations in the foregoing year;
• Participation of goods of domestic origin with no less than 51% of the value of goods which are the subject matter of export and financing.

Special Mandatory Requirements

• Positive evaluation of the Borrowers financial standing;
• Positive evaluation of the export project profitability;
• Positive evaluation of the quality – safety of the security instruments.

Additional Non-mandatory Requirements

• Achievement of positive net export effects;
• Status of predominantly exporting company.

If in addition to the general and special mandatory requirements the Exporter should fulfill also the additional non-mandatory requirements, the Exporter may be granted more favorable financing terms and conditions by AOFI.

Loan approval procedure:

• The Exporters submit request for loan approval and fill out an application form. Enclosed with the filled out form they have to submit the necessary documentation (list of documents is specified on the last page of the application form);
• Qualified AOFI specialists analyze the submitted documentation, have interviews with the applicant, visit the applicant’s company, and on the basis of the collected data and supplied documents prepare a proposal for the Executive Board;
• The Executive Board passes decision on approval or rejection of the particular loan arrangement and terms and conditions under which the loan shall be granted.

After the loan is granted, the contract with the client is signed, collateral for the regular loan repayment are established followed by loan disbursement.

CO-FINANCING WITH THE CLIENT’S COMMERCIAL BANK

In addition to direct financing, AOFI provides also co-financing in cooperation with the Exporter’s Commercial Bank. AOFI provides the Exporter, under the applicable condition for the exporter category to which this particular company belongs, with a portion of the funds, subject to Commercial Bank financing the other portion of the requested loan under the same terms contracted with AOFI (interest rate and all costs up to maximum 10% annually).

REFINANCING THROUGH THE CLIENT’S COMMERCIAL BANK

AOFI is placing funds to Commercial Banks with applicable interest rate for particular Exporters so that Commercial Banks, by using those funds, charge the interest rate for the Exporters up to maximum 10% annually. The Banks may than by linked arrangements on this basis (refinancing with co-financing) place to the Exporters also a portion of own available funds subject to interest rate and all costs being limited to maximum 10% annually.

Business operations that the Factor-AOFI carries out for the Adherent:

• Provision of liquid assets by advance payment effected immediately after submission of the documentation and after signed contract on certain percentage;
• Receivables records management / keeping. The AOFI keeps records of all transactions based on assigned receivables in accounting sheets, updating them and notifying the Adherent / Exporter on all occurring changes;
• Collection of Receivables; and
• Collection risk take-over, in cooperation with Insurance Sector, which enables the Client / Exporter to have collection certainty.

Types of factoring business:

The AOFI carries out for its clients the international – export factoring and internal factoring business i.e. factoring business at the domestic market with subsidy rights for the Exporters.

Who are the factoring clients?

• All export-oriented companies generating an annual turnover of EUR 300,000.00, irrelevant of the company size, and having good multiannual programs and high quality buyers / debtors, which, on the other hand, do not have sufficient current assets to finance longer collection periods;
• Small and medium companies (SMC) doing business with large international systems, which have neither sufficient human resources nor financial power for additional indebtedness at the financial market;
• Companies taking account of its own solvency by increasing the speed and quality of collection, and of current assets for further investments, simultaneously reducing the collection costs and possible losses;
• Companies offering goods with unscheduled payment date or with deferred payment, or companies starting business with new buyers / debtors.

Advantages of factoring:

• Solvency – More rapid receivables collection is ensured and the necessary funds for payment of one’s own liabilities and financing of the production are provided by advance payments;
• Safety – Receivables that are subject matter of factoring can be “covered” by a credit insurance policy from non-payment due to insolvency of the debtor / buyer;
• Creditworthiness increase – Image of the financial standing of the Adherent / Client is improved because the balance is not burdened by short term liabilities like in the event of a loan so that it does not reduce the credit potential with commercial banks;
• Competitiveness – Competitive position is improved both with buyers and suppliers, which enables the Adherent / Client to offer longer payment terms and sale of the goods with unscheduled payment date.

Realization of factoring business and costs:

In order a factoring deal to be carried out, the following is necessary:

1. The Adherent should fill in the required documentation:
   • Questionnaire with basic particulars of the Adherent and
   • Factoring application for particular Debtors / Buyers – Application for international / domestic factoring with insurance
2. Upon the submission of specified documentation AOFI shall analyze the financial standing of the said Debtors from the Adherent’s application after which an indicative offer with a list of Acceptable Debtors shall be provided. Together with the indicative offer the Adherent shell be provided with a bill for ordered financial standing reports on Debtors, according to AOFI tariff.
3. After the acceptance of the indicative offer, a proposal is prepared for AOFI’s Executive Board. After the positive decision of the Executive Board, Factoring Contract signing procedure is initiated.
   After the Contract is signed and after the delivery of goods to the Debtors specified in the Factoring Contract, buying of receivables shall be initiated:
4. The Adherent, after the customs clearing of the goods i.e. delivery of the goods to the Debtor, hands over the required documentation on the particular delivery (Single Administrative Document, CMR, invoice, consignment note, signed statement of assignment).
   The Statement of Assignment is a trilaterally signed document by which the Adherent notifies its Debtor that he had sold respective receivables, and the Debtor gives approval to his payment into  AOFI’s   account, on Adherent’s order, while AOFI / Factor agrees to receive the funds.
   AOFI, after checking complete submitted documentation, effects advance payment in amount  up to 90%of the nominal receivables value reduced by the following costs:
   • Factoring commission calculated on total value of the assigned receivables – delivery;
   • Interest, in case of advance payment, for the duration of the factoring financing period.
5. AOFI shall pay the remaining amount of 10% to the Adherent / Exporter after the final Debtor’s payment to AOFI. If stipulated by the Contract, the rest of this amount AOFI may use for settling the Adherent’s due liabilities.

Factoring price primarily depends on the following:

• Planned volume of sales / export that shall be assigned for collection to the Factor,
• Payment due date,
• Risk – which depends on the fact whether AOFI takes over the collection risk,
• Financial standing of the Adherent / Exporter and Debtor as well as
• Country risk of the export destination.

One of necessary requirements for increasing the competitiveness of goods and services sale to foreign buyers is also the financing i.e. sale of goods and services with deferred payment term, which represents major risk in case of company liquidation or untimely payment of the buyer.

The certainty of export business receivables collection is a prerequisite for normal business and planning i.e. for a successful increase in the number of buyers.

Through its export business – export credit insurance service against commercial risks, the AOFI ensures coverage of the said risks.

Short-term export credit insurance against commercial risk:

This insurance scope involves short-term pecuniary receivables of insurance holders resulting from delivered goods or rendered services to debtors, which have been created and reported for the insurance within the insurance contract validity period and for which the insurance holder has issued invoices to the debtors with deferred payment term up to 180 days.

Commercial risks covered by these insurance products are debtor’s insolvency risk (bankruptcy etc.) and prolonged non-payment debt risk.

Short-term export credit insurance against non-commercial risk:

The AOFI shall pay indemnity in the event the following non-commercial risks take place:

1. Non-payment of debt within six months from the contracted due date, if the debtor is a government, a government institution or a person for which a government or a government institution has provided guarantees;
2. Political events in the debtor’s country or a state of war in the country of debtor’s nationality with another country;
3. General payment moratorium, impossibility of conversion of the debtor’s currency into convertible currencies or transfer ban, until the expiry of such bans;
4. Ban on import of goods or services by the government or a government institution as a buyer or a service recipient;
5. Unilateral contract termination by the government or a government institution as a buyer or a service recipient, save when such unilateral termination resulted due to a breach of customs or sanitary regulations of the importer’s country i.e. the service recipient’s country;
6. Seizure, damage, disposal prohibition or destruction of goods carried out by the government or its institutions, from the moment the goods crossed the state border until their arrival to the foreign debtor and