Firm to provide enhanced export credit risk insurance cover to the extent of 90%
Firm to provide enhanced export credit risk insurance cover to the extent of 90%
ECGC Ltd. has introduced a scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters.
In this regard it has signed up State Bank of India (SBI) under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS). SBI has agreed to provide export credit at repo rate plus 1.3%.
Other banks are also expected to sign up for this scheme, according to ECGC top officials, who added that this scheme would benefit a number of small-scale exporters availing of export credit with banks that hold the ECGC WT-ECIB covers. This will also enable small exporters to explore new markets and new buyers, and diversify their existing product portfolio to help remain competitive.
“We expect the cover to play a game-changing role,” M. Senthilnathan, chairman, ECGC, told reporters. “We expect this to bring up the percentage of accounts with up to ₹20 crore, thereby lending further stability to ECGC portfolio,” he added.
“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 a benefit to exporters, involving reduction in interest rate,” he added.
ECGC said it had extended support to exports amounting to ₹6.18 lakh crore in the last FY22. As on March 31, 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, about 96% of these are small exporters.
