The Export Credit Guarantee Corporation (ECGC) has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90 per cent to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB-WTPC & PS).
Under the ownership of Ministry of Commerce and Industry, ECGC works with the objective of promoting exports from the country by providing credit risk insurance and related services for exports.
The scheme is expected to benefit a number of small-scale exporters availing export credit with banks which hold the ECGC WT-ECIB covers. This will also enable the small exporters to explore new markets/new buyers and diversify their existing product portfolio competitively.
M. Senthilnathan, Chairman, ECGC, said “We expect the cover to play game-changing role. We expect this to bring up percentage of accounts with up to Rs. 20 crore, thereby lending further stability to ECGC portfolio.”
He further said, “By giving 90 per cent cover to banks, we expect more small companies to get export credit from banks, benefiting these industries greatly. We expect banks to provide more concessions. The net effect will be beneficial to exporters, involving reduction in interest rate.”
The enhanced cover shall be available for manufacturer-exporters availing fund-based export credit working capital limit up to Rs. 20 crore (i.e., total packaging credit and post shipment limit per exporter/exporter group) excluding the gems, jewellery and diamond sector and merchant exporters/traders.
This new scheme will enable the banks holding ECGC’s WT-ECIB cover to explore the possibility of reducing interest rates further so that all the stakeholders are benefitted.
The enhanced cover percentage shall be made available to State Bank of India as per the previous year’s premium rate in view of its favourable claim premium ratio. However, for other banks there may be a moderate increase in the prevailing premium rates.
