Government resumes post-shipment export credit insurance

Starting in April, micro, small and medium-sized companies can protect themselves from risks associated with exports. The Ministry of Development, Industry, Foreign Trade and Services (MDIC) has resumed post-shipment export credit insurance (SCE), which was discontinued in 2019.

The new insurance has been available since the 4th for companies with annual exports of up to US$1.5 million and annual revenue of up to R$1.5 million. At the end of last year, the ministry had launched the SCE in the pre-shipment phase, when the goods had not yet been shipped. “With these two guarantees, the government acts on both ends [pre- and post-shipment] to ensure companies greater capacity to export more and strengthen their presence in foreign trade. What is our goal? To encourage Brazilian micro, small and medium-sized companies to sell their products abroad, generating quality jobs and income for our population”, said the vice president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, in a video recorded on social media.

Protection
The post-shipment credit insurance modality protects the exporter or financier against non-payment of exports. In practice, it allows the exporter to grant its foreign customers more attractive sales conditions, with payment in installments. This protection also makes it easier for banks to advance amounts receivable, allowing the exporter to receive payment in cash, even when offering payment in installments to the buyer of the goods in another country.

Likewise, in the pre-shipment modality, the financier who advances the export resources to the exporter

is protected against the risk of non-completion of the export and also against the risk of non-payment by the importer.

Lower interest rates
Both pre- and post-shipment, the SCE provides an additional benefit by promoting access to better financing conditions. This is because the SCE reduces the risk for banks that grant credit to exporters, whether as pre-shipment working capital or as refinancing of credit to the importer during the commercialization phase. The Exporter Financing Program (Proex), also from the federal government, accepts export credit insurance as collateral.

With resources from the Export Guarantee Fund (FGE), exporter credit insurance is operated by the Brazilian Agency of Guarantee Funds and Guarantees (ABGF), under the guidelines of the Foreign Trade Chamber (Camex), linked to the MDIC. In 2024, coverage worth US$15T 9.15 million was approved in 13 operations and 9 companies benefited.

Who can hire 

• Exporting companies with annual revenues of up to R$1,500 million. This is the general rule for considering them as micro, small and medium-sized companies.

Furthermore, in order to hire the SCE, they need to have:

• Annual export revenue of up to US$1.5T3 million, to contract post-shipment SCE;
• Annual export revenue of up to US$1.5 million, to contract pre-shipment SCE.

Advantages

• There is no requirement for counter-guarantees (assets that the exporter must offer to obtain insurance);
• Additional type of guarantee, which can be useful for companies that have difficulty obtaining other types of guarantees.guarantees;
• Does not compromise the exporter's credit limit;
• There is no minimum export value;
• There is no restriction on eligible products or services.

Coverage period

In the post-shipment phase, the SCE covers export operations with terms of up to two years. In the pre-shipment phase, it is 180 days.