The challenge

As one of the world’s leading manufacturers, Giti Tire Pte Ltd, uses credit insurance as an integral part of the company’s accounts receivable risk management and sales processes. Victor Goh, Treasury Manager, explains: “It is our aim to make sure that customers with material accounts receivable exposures will be covered by credit insurance and our sales limits are set based on the approved limits that we agree with Atradius. If credit sales exceed approved credit insurance limits, additional collaterals in the form of bank guarantees or some cash advance payments will be requested from our customers.”

He adds: “Other than credit risk management, we also leverage on the credit ratings provided by credit insurer on individual buyers to alert our sales team on potential deterioration of buyer’s financial health. We also appreciate the country and industry segment insights provided by our credit insurance partner.”