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Government planning credit insurance fund

Microscope contributor


Resellers will be watching with interest if mooted government plans to step in and offer credit insurance to firms becomes a real policy later this month.

Getting hold of credit insurance has become increasingly difficult not just because of the downturn but because some players in that sector have pulled away from the channel in recent months and in isolated cases have walked away from the IT market completely.

According to media reports, which seems to be the government’s favoured way of preparing the ground for a policy shift, it will unveil a plan to offer a scheme that will cover 50% of credit insurance payouts from a fund worth around £5bn.

In The Times there are further details that there will be a caveat with only medium-risk companies being considered for the cover and the Department for Business, Enterprise and Regulatory Reform is considering the measure to get money trading back on track.

In recent weeks the prospect of channel players getting their credit cut has become an almost daily phenomenon as agencies including Euler try to balance their risk in the sector.

Recent high profile cases of credit reduction include DSGi, which has seen its limits dropped, as well as some resellers.

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