ECGC plans products for small, medium exporters

LN Revathy Coimbatore | Updated on November 24, 2017 Published on January 28, 2014

MSME (Micro, Small and Medium Enterprises) exporters have something to cheer. The Export Credit Guarantee Corporation (ECGC) is looking to address their concern by introducing four products. These products await the insurance regulator’s nod, according to ECGC Chairman-cum Managing Director N Shankar here.

Explaining the Corporation’s proposed offer, on the sidelines of the fifth edition of ECGC- D&B Export Risk Management Conclave 2013-14, he said, “We want to set separate policies for the small and micro exporters because this sector always complain of not getting finance from banks. So, we intend to offer a normal cover.

“In addition, in factoring, exporters get without recourse finance and most factoring companies offer only domestic factoring services. So, we want to explore the possibility of offering cover to factoring companies and initially, we want to cover only MSMEs” he added.

He further clarified that he meant that small exporters would be those with an export turnover of less than Rs 5 crore; and those with less than or equal to Rs 1 crore would be categorised as micro exporters. I am not going to follow the MSME definition, he added.

Stating that the Corporation had a scheme of direct factoring, which became inoperative because of the global economic crisis, Shankar said ‘we intend to restart the process of direct factoring. This is expected to be introduced during the first quarter of 2014-15. I have got the clearance from the Board,’ he added.

Rates hike

On the hike in premium rates, he said “we have not increased the card rate for over a decade now. It has remained constant; in fact, we reduced the card rate by 10 per cent during the 2008 meltdown. Now, the country rating is being changed and the rating monitored every three months.”

ECGC is also in the process of revising and updating the country rating model with the help of an external agency, as the existing model was formulated a decade ago.

The corporation has already initiated a process to assess the buyer-rating, taking into account the qualitative and quantitative factors to arrive at the limit that can be given to a particular exporter.

To ensure transparency, the Corporation has constituted an Independent Review Committee, which is managed by external experts. The Committee’s decisions are recommendatory in nature, he said and pointed out that this external committee convened three meetings since April and out of the 18 cases referred, had given recommendations favouring exporters in three cases.

‘We have decided to honour their decision,’ he said.

Published on January 28, 2014
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