Export Credit Guarantee Corporation

Presented by Group - 5
Simon Choudhury Swaroop Ranjan Baghar
Smriti Pattnaik Tapan Kumar Jena
Somyakant Mohapatra Titiksha Mohanty
Subhasis Mohanty Vaishali Joshi
Sunil Kumar Singh
What is ECGC?

• Export Credit Guarantee Corporation of

India Limited, was established in the year
1957 by the Government of India to
strengthen the export promotion drive by
covering the risk of exporting on credit.
What does ECGC do?

• Provides a range of credit risk insurance covers to

exporters against loss in export of goods and
services
• Offers guarantees to banks and financial
institutions to enable exporters to obtain better
facilities from them
• Provides Overseas Investment Insurance to
Indian companies investing in joint ventures
abroad in the form of equity or loan
How does ECGC help exporters?

• Offers insurance protection to exporters

against payment risks
• Provides guidance in export-related
activities
• Makes available information on different
countries with its own credit ratings
How does ECGC help exporters?

• Makes it easy to obtain export finance

from banks/financial institutions
• Assists exporters in recovering bad debts
• Provides information on credit-worthiness
of overseas buyers
Need for export credit insurance

• Risks even at the best of times

• War or civil war may block or delay
payment
• Coup or an insurrection
• Balance of payment problems
• Insolvency or protracted default of buyers
 EXPORT INSURANCE

Goods Receivables

Loss or Exchange Payment Risk

Damage Risk

Hedging by CREDIT
Marine
Authorized INSURANCE
Insurance
Dealers
RISK COVERED

COMMERCIAL RISKS
– Insolvency of buyer/LC opening bank
– Protracted Default of buyer
– Repudiation by buyer
POLITICAL RISKS
– War/civil war/revolutions
– Import restrictions
– Exchange transfer delay/embargo
– Any other cause attributable to importing country
Risks Covered by ECGC

RISKS

POLITICAL RISK COMMERCIAL RISK

BUYER BANK
COUNTRY

LC / NON – LC LC
Policies & Products

• Standard Policy
• Small Exporters policy
• Specific Shipment Policy (short term)
• Export Turnover policy
• Specific buyer wise policy
• Consignment export policy
• Global entity policy
• Single buyer exposure policy
• Multi buyer exposure policy
• Software project exports policy
• IT enabled (single customer) policy
• IT enabled (multi customer) policy
• SME Policy
• Customer specific policy (Tailor made)
Shipments (Comprehensive
Risks) Policy

•Whole Turnover principle- all exports covered

Selective options for LC/Associates/Consignments
90% cover
•Advance Premium subject to Minimum premium of
Rs.10,000/-
•Policy Period - 2 years
•Credit limit (Drawee wise) on all the buyers
Monthly declarations with premium due
•Premium rates schedule issued with Policy
•No claim Bonus – every year 5% subject to maximum of
50%
Multi buyer exposure policy

• Cover on exposure as opposed to turnover and cover for more than 1 buyer
• Discretion to choose buyers for cover with exporter and shall be acceptable
to ECGC
• Processing Fee Rs.5000/- to accompany application
• List of buyers to be given with proposal and any addition to be advised
• Minimum 10% of projected turnover will be fixed as Aggregate Loss Limit
(ALL) which will be the Maximum Liability
• Exporter can opt for higher exposure than 10% of turnover
• Cover for each buyer is 10% of ALL as Single Loss Limit (SLL)
• Exporter to have access to ECGC website for checking defaulter buyer list.
• Coverage is 80% and lower cover available with proportionate reduction of
premium. Single premium rate irrespective of country grading
• Upfront premium payable before issue or in quarterly instalments
• 5% No Claim Bonus reduction on renewal
MSME POLICY

• Policy issued for small exporters with Export

Turnover not exceeding Rs10 Lakhs and
registered under MSME Act, 2006
• Cover available upto Rs10 lakhs with annual
premium of Rs 5,000 and a processing fee of
Rs1,000
• Cover available will be 90%
• Maximum claim payable is Rs3 lakhs on any
buyer
• No requirement of monthly declaration of
shipments
 EXPORT FACTORING
SERVICES
• Factoring services involving finance, credit
protection, collection under one roof
• Finance against export receivables facilitated
through a bank
• Credit protection available after assessment of
buyers
• Receivables financed without recourse
• 80% prepayment against invoices and balance
after 90 days from due date less charges, if
payment not received
• Details available at factoring@ecgc.in
 Export Credit Insurance
Covers to Banks

• Covers for working capital granted by

commercial banks to Exporters at Pre
shipment and Post shipment stages
• Covers available on exporter wise, bank
branch wise and bank wise
• Losses due to protracted default /
Insolvency of exporters covered
• Cover varies from 60% to 95% depending
on the type of cover
Export Stimulus Package

• Additional cover of 5%, subject to maximum protection of

95% available for all MSME exporters
• All exporters of Textiles ( including handicrafts and
handlooms), Gem & jewellery, leather, engineering goods,
carpets, project goods, auto components and chemicals
will also get the additional protection of 5%
• Additional cover through the National Export Insurance
Account of the GOI
• Bank advances to MSME borrowers for exports will get an
additional protection of 10% subject to maximum
protection of 85% under the Credit Insurance covers to
banks
• Additional cover available for shipments /advances made/
granted during the period 1st Jan 09 to 30th June 09
Notable achievements

• Largest Policy – short term Rs.250 crores

• Largest database on buyers 3 lakhs
• Largest credit limit Rs.80 Crores
• Largest claim paid Rs.120 crores
• Quickest claim paid 2 days
• Highest compensation-Iraq Rs 788 Crores