Export Credit Guarantee Corporation of India Ltd is an agency owned by Government of India that is set up to provide credit insurance to both exporters and banks of India. Its functions are controlled by the Ministry of Commerce and Industry through a Board of Directors consisting of representatives from various strata like the Government, Reserve Bank of India, Banking sector, Insurance and the exporting community. ECGC is an export promotion organization which works for improvising the competitive capacity of Indian exporters. ECGC does so by providing exporters the credit insurance against the goods that are to be traded which is comparable to those available to their competitors from most other countries. The premium rates are at their lowest possible. ECGC has formulated various export credit risk insurance products to suit the needs of Indian exporters and commercial banks. This Corporation is the seventh largest credit insurer of the world considering its exports coverage. Paid up capital of the company at present amounts to Rs. 1200 crore and its authorized capital is Rs. 5000 crore.
A historical brief:
Export Risk Insurance Corporation (ERIC) came into existence realizing the importance of a body to cover export risks in 1957 as an entirely state-owned Private Ltd. Company. To bring Indian identify in the name, ECGC was renamed as Export Credit Guarantee Corporation of India Ltd in the year 1983.
Click here to read in detail about the organization structure of ECGC
Brief functions of ECGC:
-The organization provides a range of insurance covers to exporters to hedge against loss in export of goods and services
-ECGC offers Export Credit Insurance covers to banks and financial institutions to enable exporters to obtain better facilities from them
-It provides Overseas Investment Insurance to Indian companies investing in joint ventures abroad in the form of equity or loan
Hence, EGCC helps exporters in the following ways:
-By offering protection to exporters against payment risks through insurance
-By providing expert guidance and furnishing exporters with its own credit ratings on every country.
-By making it easy to access export finance from banks/financial institutions
-By assisting exporters in accessing credit-worthiness of overseas buyers and assisting in recovering bad debts
Dun & Bradstreet (D & B) alliance with ECGC:
D & B has an agreement with ECGC such that the members under ECGC shall use its best endeavors to promote marketing and distribution of Cross Border Information Services and Domestic information. These are the services available under that agreement.
Business Information Report (BIR) on buyers to exporters is provided upon exporter’s request submitted at the nearest office of ECGC.
Business Marketing Services (BMS) is provided by D & B as a list of 10 buyers for a specific commodity and/or from a selected country from its vast database.
Duns Number is provided to any exporter who is the Policyholder of ECGC and approaches D&B free of cost through ECGC. By registering, the Indian exporter can get inquiries from all over the world for their products.
Products of ECGC:
Short term, medium and long term plans are available under ECGC’s Export Credit Insurance for Exporters and Banks. For specific details about schemes, please visit ECGC India website.
The riskiest part of an export is the guarantee of payment. They have become even more uncertain and complicated because of the consequences of changing policies and economic changes. A war outbreak or political disturbances can have a direct effect on exports due to blockage of exported goods or delay in their payment. As an added uncertainty, exports have to effectively tackle the possible insolvency or willing defaults of buyers. Buyers’ inability to pay may get aggravated due to political or economic instabilities. The export credit insurances offered by DGFT are designed to protect buyers from all those possible risks.
export credit guarantee
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