Reetu | Jul 27, 2022 |
New ECGC Scheme for Small Exporters to Insure Export Credit Risk up to 90%
ECGC has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).
Many small exporters who use banks with ECGC WT-ECIB coverage for export credit are anticipated to profit from the scheme. Additionally, this will give small exporters the chance to research new markets and potential customers while competitively diversifying their current product line.
We anticipate the cover to play a game-changing role, said ECGC Chairman M Senthilnathan during a press conference in Mumbai today. We anticipate that this will increase the percentage of accounts with up to Rs. 20 crore, thereby strengthening the stability of the ECGC portfolio. “We expect more small enterprises to secure export credit from banks by providing 90 percent cover to banks, tremendously boosting these industries,” he continued. We anticipate banks to extend greater benefits. The overall result will benefit exporters and result in a reduction in interest rates.
The ECGC Chairman expressed gratitude to the Ministry of Commerce and Minister Shri Piyush Goyal and stated, “The Government assisted us with significant financial infusion in recent years. We came to the choice we’re announcing today as a result of this and the requirement to make our coverage more beneficial to exporters.
When describing the function of the government of India’s top export credit agency, Shri Senthilnathan said, “The countercyclical role played by organisations like ECGC is comparable to that of a fireman; when credit is in trouble, credit insurance agencies step in to stabilize the market.”
Shri Senthilnathan continued, “All governments took various measures to stabilise the market in light of COVID-19, as a result of which, ECGC has not withdrawn coverage provided to exporters, contrary to expectations, export credit insurance agencies throughout the world have observed only average levels of claim ratios, not high ratios.”
ECGC provided support for exports totaling Rs. 6.18 lakh crore in the most recent financial year (FY) 2021–2022. As of March 31, 2022, more than 6,700 different exporters had access to direct cover, while more than 9,000 different exporters had access to the Export Credit Insurance for Banks (ECIB). It is noteworthy that 96% of these are small exporters.
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