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The Government of India set up the Export Risks Insurance Corporation (ERIC) in July 1957 in order to provide export credit insurance support to Indian exporters. It was transformed into Export Credit & Guarantee Corporation Limited (ECGC) in 1964. To bring the Indian identity into sharper focus, the Corporation's name was once again changed to the present Export Credit Guarantee Corporation of India Limited in 1983. ECGC is a company wholly owned by the Government of India. It functions under the administrative control of the Ministry of Commerce and is managed by a Board of Directors representing Government, Banking, Insurance, Trade, Industry, etc. ECGC: Provides a range of credit risk insurance to expo rters against loss of goods and services. Offers guarantee to banks and financial institutions to enable exporter obtain better facilities from them. Provides overseas investment insurance to Indian companies investing in joint ventures abroad in the form of equity or loans. Offers insurance protection to exporters against payments risks. Provides guidance in export related activities. Makes available information on different countries with its credit ratings. Makes it easy to obtain export finance from ban ks/financial institutes. Assists exporters in recovering bad debts. Information on credit- worthiness of overseas buyers.
Need for export credit insurance: Payments for exports are open to risk even at the best of times. The risks have assumed large prop ortion today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result. Economic difficulties or balan ce of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of goods imported. In addition, the exporters have to face commercial risk of insolvency or protracted default of buyers. The c ommercial risk of a foreign buyer going bankrupt or losing his capacity to pay is aggravated due to political and
. and to enable them to expand their overseas business without fear of loss.economic uncertainties. both political an d commercial. Export credit insurance is designed to protect exporters from the consequences of the payment risks.