Export Credit Guarantee Corporation of India Ltd. (ECGC) is a Government of India Enterprise founded on 30 July 1957. Its headquarters are in Mumbai, Maharashtra.
ECGC provides export credit insurance facilities to exporters and banks in India. It was established to enable exporters to expand their overseas business without fear of loss.
It functions under the administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking , insurance and exporting community.
ECGC is the seventh largest credit insurer of the world in terms of coverage of national exports.
What does ECGC do?
- Provides a range of credit risk insurance covers to exporters against loss in export of goods and services.
- Offers Export Credit Insurance covers 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.
What is the need to provide export credit insurance facilities?
Example: Some industrialist wants to export his material to outside country. The payment will not be done in advance. So there is a risk in exporting outside. In a view to help exporters export without taking risk ECGC was founded where exporters can go and ask for insurance of their exports.
- Payments for exports are open to risks even at the best of times.
- An outbreak of war or civil war may block or delay payment for goods exported.
- Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or on transfer of payments for goods imported.
- At any point in time, the foreign buyer can go in state of bankruptcy or insolvency.
But in any of the conditions specified above, your payment is secured with ECGC.
What else facilities does ECGC provide to exporters?
- It provides guidance to exporters in export-related activities.
- It makes available information about different countries with it’s own credit ratings, so that the exporters export their products to risk free countries.
- It also provides information on credit-worthiness of overseas buyers.
- It makes it easy to obtain export finance from other banks/financial institutions.
- It assists the exporters in recovering their bad debts.