Empowering Exports FY 2017-18

News Desk

ECGC, headquartered in Mumbai,has 60 Branch Offices & 5 Regional Offices spread across India. ECGCendeavors 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.1500crore as on 31st March, 2018. Its net worth as on 31st March, 2018 stands at Rs.3737 crore.

The role of an Export Credit Agency (ECA) is indispensable in the export strategy of any country and ECGC being one of the oldest ECAs in the world has been playing a crucial role in insuring the export receivables and lending to exports.  The exemplary service rendered has been validated by the best ECA award won against competition from older and larger ECAs.

Addressing the media to highlight business performance for the FY 2017-18, Mrs. Geetha Muralidhar, Chairman-cum-Managing Director of ECGC mentionedthe Company 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 year 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.1,77,349crore. 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 5,12,000and 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.7,416crore. Under NEIA 110 projects are supported in 38 countries through 177 covers. Exports of Rs.28,800croreare 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.Despite this huge stress, a profit of Rs.130 crore before tax with a dividend of Rs.15 crore to Government of India (GoI) has been concluded. The investment asset level of the Company was over Rs.8800 crore as at the end of the year.

 

In order to recognize the contribution of Indian exporters, an exporters’ awards function was held in New Delhi on 6th March, 2018 at the conclusion of Diamond Jubilee celebration wherein 30 exporters were honored.  A chronicle of ECGC’s 60 years journey was also released on this occasion by Hon’ble Commerce & Industry Minister.

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ECGC has been participating in the International Working Group (IWG) on Export Credits to evolve a set of international guidelines on the officially supported export credit proposals for Projects/Export of Capital goods involving a credit period of more than 3 years.

ECGC will be representing 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.

The future plans of ECGC are to:

  1. increase the value of business covered to Rs 9.60 lakh crore from Rs 6.41 lakh crore
  2. target  17500 meets; One to one meeting with one prospective clients / day / officer
  3. increase the share of exporters business from 27% to 38%
  4. Increase the risk value under Medium and Long Term (MLT)by 100% by FY 2020.

 

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.