Mumbai, July 26: Export Credit Guarantee Corporation of India (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.
It has been introduced under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC and PS).
The scheme is expected to benefit a number of small-scale exporters availing of export credit with banks which hold the ECGC WT-ECIB covers, an official statement said on Tuesday.
“We expect the cover to play a 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,” ECGC Chairman M Senthilnathan said.
He further said, “By giving 90% 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.”
Explaining the role played by the premier Export Credit Agency of Government of India, Senthilnathan said. “Countercyclical role played by organizations like ECGC is similar to that of a fireman. When credit is suffering, credit insurance agencies step in to stabilize the market.”
The enhanced cover will be available for manufacturer- exporters availing fund-based export credit working capital limit up to Rs 20 crore.
The 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 will be made available to State Bank of India. As per the previous year’s premium rate in view of its favorable claim premium ratio. However, for other Banks there may be a moderate increase in the prevailing premium rates.