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Improving the credit of companies in emerging
markets
Monterrey, Mexico March 2002
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Cost and need for creditare higher for companies
in emerging markets

• Limited information availability
• High perceived risk
• Growing demand for credit management
  expertise in companies and banks
• Supplier credit is the first source of funding
  for a significant number of companies and
  countries

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Consequences are very negative for companies and
for national economies

• Higher cost for imports
• Lower value for exports
• Financial constraints for companies and economies

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The Internet could make it better . . . or worse

• More information available at a lower cost
• More financial services available
• But tomorrow. . .credit refusal can be at a
  click

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How to enhance the credit of companies in
emerging markets

• Develop expertise on companies in emerging
  markets
• Share expertise with institutions in emerging
  markets
• Offer companies easy-to-use, versatile tools to
  manage and minimize trade risk

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• The Coface Response

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1. Develop expertise on companies in emerging
markets

• Pending trade credit risk on 220,000 companies in
  emerging markets (out of a total of 2.2 million)
• Covering 14.1 billion debt exposure in emerging
  markets (out of a total of 109 billion)
• Compiling data on 1.1 million companies in
  emerging markets (out of 41 million in our
  database)
• There are good companies in every country

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2. Share expertise with institutions in emerging
markets

• Our credit system is open to partners, including
  those in emerging countries
• Partners in 49 countries include National Ex-Im
  banks or credit insurers of Algeria, Brazil,
  China, Czech Republic, Egypt, India, Kuwait,
  Morocco, Malaysia, Oman, Poland, Romania,
  Singapore, Thailand, Tunisia

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3. Offer companies easy-to-use, versatile tools
to manage and minimize trade risk

• Solution is a
  worldwide information, rating and credit risk
  protection system. It offers three exclusive
  services

• _at_rating Credit Opinion - check the
  creditworthiness of a trading partner anywhere in
  the world
• _at_rating Quality Label - demonstrates a companys
  creditworthiness as a trading partner
• _at_rating Protection protects against risk of
  non-payment

• Enhanced visibility and credit for companies
• Confidence in commercial trading partners
• Security of financial transactions

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What is the Credit Opinion?

• Credit Opinion shows a companys
  capacity to honor its commercial commitments to
  customers and suppliers
• To check a prospective partners credit opinion
  before accepting or placing an order, simply
  connect to www.cofacerating.com and gain access
  to information on 41 million companies in 176
  countries

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Credit Opinion - a simple and
reliable assessment

• There are two _at_rating Credit Opinion categories
• Financially sound companies are identified on one
  of five levels, reflecting the exposure level
  that can be reasonably accepted
• R 10,000
• _at_ 20,000
• _at__at_ 50,000
• _at__at__at_ 100,000
• _at__at__at__at_ 100,000 and above
• X flags companies with elements of weakness

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• The Quality Label distinguishes those
  companies that show reliability in commercial
  transactions
• It is indicated by a logo
• The Quality Label may be used in all company
  marketing
• The Quality Label is low-cost, obtained via
  simple process, and with company data remaining
  confidential

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What is Protection?

• Through Protection, any company
  can obtain protection against the risk of
  non-payment on transactions with companies that
  hold an _at_rating Quality Label
• Hence facilitates the ability
  for companies to obtain supplier credit

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• Coface Group has signed more than 300 partnership
  agreements
• With credit insurers, through CreditAlliance, our
  premier network in 50 countries.
• With credit information providers through
  InfoAlliance, our premier network in 70
  countries
• With banks and factors, electronic marketplaces,
  and B-to-B service providers such as
  Gemplus, TradeCard, Kompass, Oracle, Cap Gemini
  Ernst Young, SGS, etc.
• With trade organizations throughout the world,
  including Brazil, Peru, Colombia, Korea, Hong
  Kong, Poland, etc.

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In conclusion, provides companies
with

• The tools to gain trading partners confidence
• The means to check the reliability of trading
  partners
• The ability to ensure security in trade
  transactions
• A way to get or offer improved trade credit

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Improving the credit of companies in emerging
markets
Monterrey, Mexico March 2002