Ask any Affiliate or stakeholder in FIDI to name one of the greatest features of FIDI, and there is a good chance that one out of two will tell you it is FASI.
Many of you still know it as PPP or the Slow Payers report, but nowadays it is FASI, or in full: FIDI Affiliates’ Secured Invoices. FASI is, in essence, a tool that allows any Affiliate to secure their invoice to a fellow Affiliate.
After all, international trading is in the very nature of our business. As a FIDI Affiliate, you form long-lasting partnerships with other members. When overdue payments enter the picture, however, those partnerships can come under stress. With FASI, you can quickly secure any overdue invoice between you and your FIDI agent, earning you something that money just can’t buy: solid trust.
Now, we all recognise that margins are under increasing pressure. Combined with a growing under-capitalisation in our business, this almost certainly leads to longer payment delays. Moreover, we have seen that, for some companies, this has led to going out of business. Fortunately, there was FASI to compensate the unpaid invoices from fellow FIDI Affiliates – providing, of course, they have followed the reporting process as described in our rules. FASI has seen a record payout in 2018, and it looks like we will have another big payout in 2019 (see graph).
Again, the FASI payouts are good news for the related creditors, who get compensation for their unpaid invoices. The fund is being used for what it is meant for, and that is how it should be. Nevertheless, we cannot hide the fact that those major payouts are causing a big dent in our fund and, for the future, this is reason for concern. At the same time, we see a clear trend of not only higher annual payouts, but also more frequent calls on our fund.
The FASI fund operates like insurance – and much like any insurance, when the claim payouts are on the rise, the insurer will increase the premium. This is in direct relation to claim payouts, and this is not any different for FASI.
To recover from these high payouts, and to
protect the interests of all the Affiliates who have contributed to the fund
for many years, the Board will request the Delegates Meeting in Osaka to raise
the annual FASI contribution temporarily from €200 to €500 per full Affiliate.
This will bring the fund back into shape immediately and will safeguard the
integrity and longevity of the
FASI tool. It is important to note that the Board will review the FASI contribution annually and bring it back down to the normal level if conditions improve.
This is not new. The Board and Delegates have
increased and decreased the contribution before, each time for good reasons and
out of genuine concern for the health of the fund. We have all supported this
financial tool for many years, and it is too important for our Affiliates to
risk it going to waste. And let’s be fair, the contribution or premium paid is
minor considering the cover
the fund is offering. No insurance company in the world will provide such a cover, let alone at such a modest premium. Believe us – we tried to find one.
And while we are on the subject, please do not hesitate to secure your unpaid invoices in the FASI reporting tool. It is an easy process, and it guarantees you safety in case of calamity. Carefully follow the straightforward reporting rules, which you can find in FIDINET.