ECGC introduces new scheme providing export credit risk insurance cover up to 90% for small exporters - (26 Jul 2022)

Customs

Export Credit Guarantee Corporation (ECGC) has introduced a new scheme to provide enhanced export credit risk insurance cover to the extent of 90% to support small exporters. The scheme is under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS). It is expected to benefit a number of small-scale exporters availing of export credit with banks which hold the ECGC WT-ECIB covers.

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 and Diamond sector and merchant exporters/traders. This 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 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.

ECGC had extended support to exports amounting to Rs.6.18 lakh crore in the last FY 2021-22. As on 31st March, 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% of these are small exporters. The new scheme would enable the small exporters to explore new markets/new buyers and diversify their existing product portfolio competitively.

Tags : INSURANCE COVER SCHEME SMALL EXPORTERS