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Home / India News / 2007 / January / January 20, 2007
SME's to Benefit from ECGC Factoring Service in Addition to its Export Credit Insurance

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SME's to Benefit from ECGC Factoring Service in Addition to its Export Credit Insurance

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SME's to Benefit from ECGC Factoring Service in Addition to its Export Credit Insurance

SME's to Benefit from ECGC Factoring Service in Addition to its Export Credit Insurance

Mumbai, Maharashtra, India

Export Credit Guarantee Corporation (ECGC) India's no.1 credit risk insurer and fifth largest credit insurer globally in terms of national export coverage today formally reinforced its presence in the factoring business with the in-house division all set to take form as a business branch.

Commenting on the launch of the factoring business Dr Christy Fernandes, Chairman & Managing Director said "India exports around 14% of GDP currently out of which merchandise exports that in the preceding four years has increased by 23% plus. Despite this growth, scalable cash flow is the burning issue for every SME exporter and this is directly linked to the growth potential of Indian SME exports.

CMD added that our new factoring business exactly addresses the Indian exporter's long standing requirement to liquidate receivables into ready cash. Our new foray is in line with our corporate mission of promoting exports by guaranteeing the financing and offering credit protection of export transactions"

It is generally reported SMEs still suffer from the excessive collateral requirements and interest charged by the banks in case of short term trade financing. The small units miss out on the benefits of trade finance services and the country's economy misses out on the stimulating effects that these provide to trade and growth. If the contribution of SME sector in this aspect is enhanced, substantial benefits to the economy in terms of employment generation, enterprise building etc can be reaped.

In order to ensure that the financing needs of the exporters are met promptly, a tie-up with IDBI Bank has been arranged. As their slogan proclaims, they have joined hands with ECGC to "think bigger" and contribute in the export financing needs of the export sector. ECGC will endorse each invoice and ask our banking partner IDBI bank to finance 80-90 per cent of invoice value based on an irrecoverable guarantee by ECGC.

ECGC today provides a range of services in addition to the core activity of credit insurance. These include export credit insurance cover for banks financing exporters, enable project exports covers, investment insurances etc. Factoring will fill in the gaps left by commercial banks which rely upon fixed assets as security for loans.

Pricing of products is an important element and ECGC has given due attention to this issue. The Government expects that ECGC business will grow in the focus country markets and also focused commodity groups. Government of India is committed to provide adequate capital base and other support that would make ECGC a vibrant organization. ECGC in turn should make all efforts to continue find innovative solutions that match with the expectations of exporters, bankers and financial institution.

Looking ahead ECGC Chairman opined "We are confident that the new business has a great potential and the time is right to utilize our expertise as a single window provider for a wide range of trade finance related services."

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Amit Mohile, IPAN, + 91 9870516433

Source: Export Credit Guarantee Corporation of India Ltd (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

India News / Press Releases on January 20, 2007

Photograph SME's to Benefit from ECGC Factoring Service in Addition to its Export Credit Insurance
Business Wire India

Also see International News / Press Releases on January 20, 2007

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