ECGC launches new scheme for benefit of small exporters.

July 29, 2022

The Export Credit Guarantee Corporation of India (ECGC) launched a new scheme to provide enhanced export credit risk insurance amid rising uncertainties in global trade.
The scheme provides enhanced export credit risk insurance cover up to 90 per cent to support small exporters under Export Credit Insurance for Banks Whole Business Packaging Credit and Post Shipment (ECIB- WTPC&PS).
According to ECGC chairman M. Senthilnathan “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 a benefit to exporters, involving a reduction in interest rate.”
SBI is the first to benefit from the new policy and ECGC is in talks with other lenders. ECIB does not cover the entire loss incurred by the bank in respect of the account. The loss is shared between the ECGC and the bank in a specified percentage. The average percentage of cover is estimated to be around 70 per cent for export accounts with limits up to Rs 20 crore. The increased cover percentage will now be 90 per cent.
The enhanced cover for SBI will be at the premium rate of the previous year, considering its favourable claim premium ratio. For other banks, there may be a marginal increase in the premium rates. The increase in cover will be based on expected interest concession from banks for accounts with export credit working.
In the financial year 2021-22, ECGC had extended support to exports worth Rs 6.18 lakh crore In addition, as of March 31, 2022, more than 6,700 exporters benefitted through the direct cover issued to exporters and around 9,000 distinct exporters benefitted under the Export Credit Insurance for Banks (ECIB). It should also be noted that about 96 per cent of these are small exporters.