INVENT Multiple Agencies and Actuaries (Invent), a local actuarial consulting firm, has developed a credit insurance product to cover Zimbabwean imports from South Africa in a major boost for the growth of local firms.
Zimbabwean firms have been forced to import on cash basis due to the tough operating environment.
Invent managing consultant, Tanaka Zingwanda, said the move would boost trade between two countries.
“We are pleased to have developed a much-needed insurance product which secures trade transactions between the two countries. This product aligns with our vision to challenge the status quo through creating value and helping our partners to find new opportunities in Africa,” Zingwanda said.
According to Invent, the insurance product will be issued by Asset Finance Insurance South Africa (AFI), a collaboration that signified a significant milestone in advancing trade objectives of the African Continental Free Trade Area (AfCFTA).
Trade credit insurance covers businesses in case customers fail to pay debts or pay later than agreed.
The product would give the assurance to South African firms that they would receive their monies.
Credit insurance’s primary purpose is to assist a policyholder in three areas.
These are to prevent sales to companies that are likely to default and to compensate policy holders where their buyers have had a sudden change of fortune and there is a default on payment.
Credit insurance supervises the collection of debt when it is not yet time to claim.
Invent said it triggered a reinsurance agreement between AFI and multiple reinsurance players arranged by Fachs Reinsurance Brokers (Fachs) to protect South African exporters who offer credit to their Zimbabwean counterparts.
It added that the agreement promoted and increased trade between South Africa and Zimbabwe, contributed to the objectives of AfCFTA and would boost intra-Africa trade.
AFI managing director Gavin Bagley echoed similar sentiments, emphasising the significance of the partnership.
According to Bagley, the joint venture signified a strategic alliance poised to unlock growth opportunities for his company’s clients and bolster a market position.
Fachs managing director Farai Zimbango said they were excited to be part of this innovative reinsurance arrangement, which is a game changer for its trading clients between the nations of Zimbabwe and South Africa.
“It is products like this one which make us proud to be part of the insurance industry, providing solutions that ease doing business among our mutual citizens and clients,” Zimbango said.
