DELIVERING BALANCE SHEET PROTECTION
WITH WORKING CAPITAL FINANCE
Partner Banks and Bajaj Allianz General Insurance
Co (BAGIC) have joined forces to offer a unique product
for SMEs: working capital finance combined with protection
against non payment from your trade credit customers.
Whenever your company seeks short term funding secured
on trade receivables from a partner bank, BAGIC can
enhance the value of the collateral through credit
insurance to maximise your funding. This leaflet explains
the concept, benefits and operation of this product.
Each time a company sells goods on credit, it runs
the risk of not being paid by its customers. Non-payment
may arise from either insolvency or delayed payment.
BAGIC provides credit insurance to ensure that one
of your most liquid assets,
trade receivables, is protected.
Credit insurance offers a host
of benefits:
Balance sheet protection and
improved cashflow predictability
Enhances financing: Collateral
for banks to fund your business as trade
receivables are underwritten and guaranteed by BAGIC
Enables you to enter new markets
safely and expand your customer base as BAGIC provides
information and underwrites the credit risk on new
customers
Credit insurance from BAGIC improves
the quality of your credit management system by
providing a disciplined approach to new customers
credit limits, reporting overdues and undertaking
collections.
Credit insurance cover from BAGIC applies to trade
receivables which are:
Business to business transactions
i.e. excluding consumers and public sectors
Due within 151 days of dispatch
of goods and invoice date
Due from customers based in India
and designated major overseas countries
Approved prior to shipment by
BAGIC up to a maximum credit limit given credit
terms
Partner Banks and BAGIC have developed a hassle free
online way to offer
your company funding linked to credit insured trade
debts. The operation is
handled by your Lending Officer / Relationship Manager
who will:
Ask you some basic questions
on the volume of insurable credit sales and maximum
credit limits on your top 5 customers as well as
the quality of your of credit management and collection
systems to establish a sound basis for bank’s
security for the loan- the trade debts of your company.
Produce an offer letter, upon
acceptance of which, your trade receivables are
automatically insured subject to verification of
the above information by BAGIC. This takes place
within 5 working days.
Ensure that once information
verification is complete, you sign the loan and
credit insurance documentation to consummate the
transaction.
Ensure that the BAGIC personnel
visit you to explain the workings of credit insurance
arrangement whereby you designate the bank as the
beneficiary of all claims under the credit insurance
policy to ensure that the bank’s security for
the loan remain intact in the event of non-payment
by your customers.
Credit insurance from BAGIC offers you a complete
and powerful total receivables management tool to
gain access on new markets, sectors and customers
worldwide that may help to make your business more
competitive. The key to success is close co-operation
with BAGIC to ensure you submit:
Accurate information to bank’s
lending officer at the inception of the
transaction.
Any overdues notification within
the set 30 days reporting deadline after the extended
due date has elapsed
Full disclosure including adverse
information on your new and existing
customers when applying for new credit limits or
extension of existing ones
Annual declarations of credit
insured turnover so that we may adjust the
premium payable accordingly
Please contact your Relationship
Manager/ Lending Officer at our Partner
Banks who will assist you further.
