International Factoring Insurance

WHAT OPPORTUNITIES DOES INTERNATIONAL FACTORING INSURANCE CREATE?

FOR THE EXPORTER

• Access to financing without collateral in the case of deferred payment terms — immediately after export
• Ensuring continuous cash flow

FOR FINANCIAL INSTITUTIONS

• Increase in the volume of international factoring operations
• Provision of international factoring insurance based on the assignment of the exporter’s receivables from foreign buyers.

WHAT RISKS ARE COVERED BY INTERNATIONAL FACTORING INSURANCE

International factoring insurance covers the risk of non-payment by the buyer for receivables assigned by the exporter to banks and/or credit organizations in the Republic of Armenia (RA), including both commercial and political risks.

COMMERCIAL RISKS

• Bankruptcy or insolvency of the foreign buyer
• Failure or refusal of the foreign buyer to fulfill payment obligations to RA banks and/or credit organizations (providing international factoring) without legal grounds

POLITICAL RISKS

• Administrative decisions or legal acts that result in the inability of the foreign buyer to make payments or convert currency
• Political events or natural disasters that lead to restrictions or inability of the foreign buyer to make payments.

WHAT ARE THE MAIN TERMS OF INTERNATIONAL FACTORING INSURANCE?

• Insurance period: up to 2 years
• Waiting period: 30–180 days
• Non-refundable amount*:10%–25%
• Insurance premium*: 0.65%–2.10%

*The insurance terms are determined based on factors such as the financial condition of the foreign buyer, the cooperation history between the exporter and the foreign buyer, the country risk classification of the buyer’s country, and other relevant considerations.