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Export Credit Guarantee Corporation

of India
Presented by
Rama Mittal
Ruchi Gupta
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.
Mission

• To support the Indian Export Industry by


providing cost-effective insurance and trade-
related services to meet the growing needs of the
Indian export market through the optimal
utilization of available resources.
A Brief Profile of ECGC

• No. of offices 5 Regional offices


and 51 Branches

• Paid Up Capital Rs 900 Cr


• Reserves Rs 913.42 Cr
Data for 2007-08
• No. of Policies in force 12533
• No. of shipments covered 364848
• No. of buyers covered 46799
• No. of countries covered 193
• No. of banks holding covers 65
• No. of bank branches covered 3709
ECGC – An Export Promotion
Institution
1/2
• 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
2/2
• 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
Risks Covered by ECGC

RISKS

POLITICAL RISK COMMERCIAL RISK

COUNTRY BUYER BANK


RISKS 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
Need for export credit insurance

• Risks even at the best of times


• War or civil war may block or delay
payment
• Insolvency of buyers
Policies & Products
Credit Insurance Policies
Policies offered to Exporters

• Standard Policy
• Specific Shipment Policy
• Export Turnover policy
• Specific buyer wise policy
• Consignment export policy
• Customer specific policy
SCR or Standard Policy

• Shipments (Comprehensive Risks) Policy,


commonly known as the Standard Policy,
is the one ideally suited to cover risks in
respect of goods exported on short-term
credit, i.e. credit not exceeding 180 days.
• This policy covers both commercial and
political risks from the date of shipment.
Percentage of risk coverage

 ECGC normally pays 90% of the loss

 Exporter has to bear remaining 10%


Specific Shipment Policy -

• Specific Shipment Policies - provide cover


to Indian exporters against commercial
and political risks involved in export of
goods on short-term credit not exceeding
180 days.
• It is issued for a particular shipment sent
to a particular buyer.
Percentage of Risk Coverage

• 80% paid by ECGC

• 20% born by Exporter


Service Policy

• Where Indian companies conclude


contracts with foreign principals for
providing them with technical or
professional services, payments due under
the contracts are open to risks similar to
those under supply contracts. In order to
give a measure of protection to such
exporters of services, ECGC has
introduced the Services Policy
Different types of Services Policy

• Specific Services Contract (Comprehensive


Risks) Policy
• Specific Services Contract (Political Risks)
Policy
• Whole-turnover Services (Comprehensive
Risks) Policy
• Whole-turnover Services (Political Risks)
Policy
Policies & Products
Special Schemes
Transfer Guarantee

• The confirming bank will suffer a loss if


the foreign bank fails to reimburse it with
the amount paid to the exporter.

• The Transfer Guarantee seeks to safeguard


banks in India against losses arising out of
such risks
Percentage of Risk Coverage

By ECGC
• upto 90% if Loss due to political risks
• upto 75% if loss due to commercial risks

By Bank
• Remaining % in both risks
Overseas Investment
Guarantee

• It is Given by ECGC for any investment


made by way of equity capital or loan for
the purpose of setting up or expansion of
overseas projects.

• The investment may be either in cash or in


the form of export of Indian capital goods
and services.
Thanks