s launched a pilot scheme to collaborate with five major local banks to develop a "risk-sharing arrangement on domestic sales in the mainland."

This will enhance insurance coverage for Hong Kong exporters, boosting their confidence and protection as they expand the "domestic market."

The five banks involved in the arrangement are BOC Hong Kong (2388), Bank of East Asia (0023), DBS Bank (Hong Kong), Hang Seng Bank (0011) and the Hongkong and Shanghai Banking Corporation

Under the arrangement, the banks will share with HKECIC their credit assessment results on the concerned mainland buyers after they are approached by an exporter for credit insurance or export loans.

Both parties will then share the risk of non-payment by the buyer with a credit limit capped at HK$100 million for each buyer group. The total credit ceiling of the scheme is HK$10 billion and HKECIC will review it a year later, HKECIC commissioner Terence Chiu Man-chung said.

Chiu said some private enterprises on the mainland are not as transparent as listed companies in terms of credit and financial information disclosure, which makes risk assessment difficult. Saying the new scheme will offer greater protection to local exporters, Chiu added it may be expanded to other regions in the future.

Chiu said that although the exports of HKECIC's clients rose by "double-digits" in the past two months from a year ago, the statistics for the first five months were still down by double-digits from a year ago.

The number of claims and total value both surged by "double-digits" in the five months amid an environment of high interest rates and inflation from a low base 12 months ago but they were still below the pre-pandemic levels, he said.

HKECIC teams up with banks to share risks