CREDIT INSURANCE FOR INCREASING SERVICE EXPORT AND CASE STUDIES

Abstract

This study aims to analyze that how Service Export Credit Insurance is being used in which countries, by which ECAs, in which ways; and to ascertain which way would be best in Turkey. As it is known, service export takes an important place in Turkey's annual total export. Service export is described as a process that a Turkish company performs services to the buyer who is located abroad provided that payment are done through an agreed currency with international payment methods. In order to regard a transaction as a service export, it is necessary to be utilized from this service abroad and beneficiary (buyer) should be located abroad. Insurer grants credit insurance coverage for the commercial and political risks deriving from the exported goods and services within an insurance policy up to a certain maturity within the credit limits allocated to the buyer. The aim of the credit insurance is promoting and directing exportation by ensuring that export receivables are covered by commercial and political risks within certain credit limits. In this study, it is analyzed what the best practices are being implemented by exemplifying from all around world, and there are some suggestions for Turk Eximbank as a guideline.