Performance of ECGC

Over the last 100 years there have been a number of crisis in the world economy. Export Credit Agencies (ECAs) were created after the First World War to enable trade to restart. They were first envisaged as a temporary measure, but one global crisis after another ensured that they exist to this day. There are almost 100 ECAs worldwide that emphasise export promotion and expansion. They come with a wide range of mandates; including insurance, guarantees and loans for exports.

An aggressive ECA is a primary instrument of the government which looks to expand the country’s exports. An ECA becomes central to national growth strategies with an expanded mandate to have a proactive role in meeting the needs of exporters. Today, no one can be complacent about geopolitical risks with the world’s fragile economic and political equilibrium.

In India, ECGC, the sole ECA offering pure cover, acts as the anchor for the mitigation of political and credit risks and for converting these risks into opportunities. A zealous risk appetite will provide the required momentum to the export efforts of India.

ECGC helps Indian exporters in keeping pace with the new challenges and opportunities. ECGC has seen a high growth period and has contributed substantially in expanding exports to difficult markets. A highly effective ECA addresses the needs of MSMEs as a priority and ECGC’s record reflects its role in this respect with over 85% of its customers in this category.

ECGC, headquartered in Mumbai, has 60 Branch Offices & 5 Regional Offices spread across India. ECGC endeavors to support Indian Export Industry with its experience, expertise and underlying commitment to progress and advance of India’s exports.

ECGC is a premier Export Credit Agency (ECA) of Government of India providing credit insurance covers to exporters against non-payment risks by the overseas buyers due to Commercial and Political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers. ECGC has an authorized capital of Rs.5000 crore and a paid-up-capital of Rs.1500 crore as on 31st March, 2018. Its net worth as on 31st March, 2018 stands at Rs.3737 crore. The exemplary service rendered has been validated by the best ECA award won against competition from older and larger ECAs.

The Corporation had 34,740 covers in force with a Maximum Liability of Rs.96,101 crore as at the end of the year on 31.03.2018. The total Risk Value covered during the FY 2017-18 comes to Rs.6,41,449 crore which is 33% of the total exports of the country. It is notable to observe that the portfolios consist of more than 85% of MSME exporters only.

As regards cover to receivables of exporters, 11946 polices were in force which covered a value of Rs.1,77,349 crore. The major coverage has been to Europe and North America for high risk transactions like open delivery and longer credit periods.  Major sectors covered were employment intensive sectors like Engineering Goods, Cotton, Textiles and Readymade Garments. Total numbers of overseas buyers on record were 5,12,000 and live buyers on whom overall limit set was 1,27,847.

The systemic role of ECGC in the context of Working Capital lending to exporters has never been more pertinent than in the present stress scenario in the banking industry. The total numbers of accounts covered were more than 22,600. In all 33 banks covering more than 4000 branches had been supported in their endeavor of lending to exporters. Here again rendering to employment intensive sectors were predominantly covered.

Under Medium and Long Term (MLT) more than 190 covers have been issued to 40 Exporters covering a business of Rs.7,416 crore. Under NEIA 110 projects are supported in 38 countries through 177 covers. Exports of Rs.28,800 crore are supported through ECGC and Rs.14,700 crore through buyer credits.

The gross claims payout during the year exceeded that of gross premium income owing to the landmark settlement of claims to banks. The total claims paid during the year to both banks and exporters have been at the highest ever at Rs.1283 crore. In addition, provisions of Rs.6000 crore have been set aside for future payouts. The company’s contribution in the last decade by way of claim settlements of around Rs.7000 crore has provided the much needed support to exporters and relief to banking system in ensuring adequate lending to exporters.

ECGC represents GoI in African Trade Insurance Agency (ATI), a Multilateral finance institution by subscribing to 100 shares having a par value of USD 1,00,000 each of class ‘B’ membership of ATI, to strengthen the support of exports to African Region through reinsurance and coinsurance. ATI provides political risk and trade credit risk insurance products with the objective of reducing the business risk and cost of doing business in Africa.

ECGC helps customers anticipate the risks and offers the right mitigants too. Its systemic role in ensuring proactive export credits has to be intensified in these stressful times. The faith reposed by GoI in the organization is fortified by the proposed capital infusion of Rs.2000 crore over a period of three years from FY2017-18 to FY2019-20. In the last 61 years, we have come far and will do much further in advancing the cause of export promotion of the nation.