ECGC gets 2,000 cr capital infusion, to help MSMEs
The government Wednesday approved capital infusion of Rs 2,000 crore to Export Credit Guarantee Corporation (ECGC) to enhance insurance coverage to micro, small medium enterprises exports.
New Delhi: The government Wednesday approved capital infusion of Rs 2,000 crore to Export Credit Guarantee Corporation (ECGC) to enhance insurance coverage to micro, small medium enterprises exports.
It has also approved contribution of grant-in-aid (corpus) of Rs 1,040 crore to National Export Insurance Account Trust (NEIA) to promote project exports. The decision for both was taken by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi.
Funds to ECGC would be infused in the three financial years -- Rs 50 crore in 2017-18, Rs 1,450 crore in 2018-19 and Rs 500 crore for 2019-20. "The infusion would enhance insurance coverage to MSME exports and strengthen India's exports to emerging and challenging markets like Africa, CIS (Commonwealth of Independent States) and Latin American countries," an official statement said.
It said that with enhanced capital, ECGC's underwriting capacity and risk to capital ratio will improve considerably. "With a stronger underwriting capacity, ECGC will be in a better position to support Indian exporters to tap new and unexplored markets. Increased capital infusion will help ECGC to diversify its product portfolio and provide cost effective credit insurance helping exporters to gain a stronger foothold in the difficult markets," it added.
Covers from the corporation will help in improving competitive position of India exporters in international markets. "More than 85 per cent of customers benefitted by ECGC's covers are MSMEs. ECGC covers exports to around 200 countries in the world," it added. ECGC offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political and/or commercial risks.