The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) has entered into a significant agreement with Al Baraka Bank Egypt by signing a Documentary Credit Insurance Policy (DCIP) valued at US$50 million.

This initiative aims to bolster Egyptian export transactions that are backed by letters of credit (L/Cs), providing a safety net against the risk of non-payment by overseas banks issuing these L/Cs.

Agreement outline

The DCIP signed between ICIEC and Al Baraka Bank Egypt is designed to enhance the bank's capacity to confirm L/Cs, thereby expanding its support for Egyptian exporters.

By insuring against the non-payment risk associated with foreign banks issuing L/Cs, Al Baraka Bank Egypt can confidently facilitate more export transactions, knowing that potential defaults are covered.

Khalid Khalafalla, CEO of ICIEC, emphasised the importance of this collaboration, stating that it plays a crucial role in de-risking Egyptian exports and strengthening economic resilience across member states.

Broader Implications

This partnership not only supports the growth of Egyptian exports but also underscores the vital role of tailored risk-mitigation instruments in facilitating cross-border trade.

By providing comprehensive coverage for documentary credit transactions, the agreement between ICIEC and Al Baraka Bank Egypt exemplifies how financial institutions can collaborate to promote economic development and stability in the region.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.