What is Credit Guarantee’s competitive advantage in the industry?
Credit Guarantee was established in 1956 and our Diamond Jubilee will be celebrated in 2016. Essentially, we only insure inter-company trade that occurs on credit terms. The supplier (our policyholder) applies to cover their credit sales on each individual customer. We then carefully investigate each of those customers and issue a ‘credit limit’ under which the policyholder is able to supply. We also subsequently monitor their customers’ credit behaviour.
As a result of our assistance and involvement, the policyholder is covered against non-payment in the result of their customer proceeding into liquidation, applying for Business Rescue or reneging on payment for a protracted period of time. A policyholder could typically expect to receive 80 cents in the Rand should a claim arise.
Credit Guarantee also has a unique ability to assist the policyholder with collecting debts due to them, either through pre-legal mitigation of a potential loss or by implementing formal collection/legal processes.
We are renowned for our claim-paying ability (we have an AA rating), as well as our quality confidential information that we hold on numerous companies domiciled inside as well as outside of South Africa’s borders.
What are the opportunities going forward and where are the areas of growth?
We have produced a specific domestic policy for SMEs and are also following the trend of establishing a significant footprint on the African continent. The SME’S debtors book could range from R500 000 to R10-million and is certainly reaping benefits for all parties concerned. In these uncertain economic times there is increased demand for our product as the market seeks to protect one of its most important and larger assets – namely its debtors book.
What have you seen as the exciting developments and potential areas for growth within the Eastern Cape economy?
The SME market is really gathering momentum from an entrepreneurial point of view, thus creating much-needed employment. The primary growth areas in the Eastern Cape continue to be agriculture, transport, logistics, solar and meat.
Originally published in the 2016 edition Eastern Cape Business.