New ECGC scheme for small exporters to insure credit risk up to 90%
New Delhi, July 27 (KNN) The Export Credit Guarantee Corp. of India (ECGC) has announced a new scheme providing enhanced export credit risk insurance cover up to 90 percent to small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).
This scheme will turn out to be beneficial for those small –scale exporters who avail export credit with banks which hold the ECGC WT-ECIB covers. It will also help exporters to tap into new markets and therefore help them diversify their existing product portfolio.
“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 benefit to exporters, involving reduction in interest rate”, ECGC Chairman M Senthilnathan said on Tuesday.
ECGC’s new scheme will allow banks holding ECGC’s WT-ECIB cover to discover the prospect 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.
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 & Diamond sector and merchant exporters/traders.
Senthilnathan during the press conference, further highlighted the various measures taken by the government to stabilize the market in view of COVID-19, because of which, ECGC has not withdrawn cover given to exporters, against expectations, export credit insurance agencies all over the world have witnessed only average levels of claim ratios, not high ratios.
ECGC had extended support to exports amounting to Rs.6.18 lakh crore in the last FY 2021-22. As on 31/03/2022, more than 6,700 distinct exporters were benefitted by the direct cover issued to exporters and more than 9,000 distinct exporters benefitted under the Export Credit Insurance for Banks (ECIB). Notably, around 96 percent of these are small exporters. (KNN Bureau)