ECGC awaiting IRDA nod for product for MSME export factoring

The Export Credit Guarantee Corporation is awaiting approval from insurance regulator IRDA to launch a cover for factoring companies to cover export factoring done by MSMEs, a top official said today.
"Once we get the approval from IRDA, we will extend it to the factoring companies - ranging from 80 to 90 per cent, ECGC Chairman-cum-Managing Director N Shankar said here.
ECGC, which is facilitating the country's exports to Iran by covering in rupee, has recently reduced the premium by 20 per cent, he said.
The corporation was also in the process of restarting director factoring, which would help exporters as export factoring was an efficient way of financing bills receivable," Shankar said at the 'Export Risk Management Conclave' organised by ECGC in association with Dun & Bradstreet India.

Export factoring would be more attractive for MSME exporters than loans, he said adding the availability of import factor abroad and the cost of import factor was relatively high at present.
"We are also in the process of revising and updating our country-risk rating model with the help of an external agency, as the existing one was formulated about a decade ago," he said.

The corporation, which paid out claims to the tune of Rs 548 crore in 2012-13, has paid Rs 468 crore in April-December to financing banks and exporters.
Major sectors from which claims arose were readymade garments and textiles, gems and jewellery, engineering goods, marine products, cotton, agro- products, yarn, fabric and leather, the official said.

ECGC covered a gross risk value of Rs.1,26,100 crore during 2012-13 and Rs. 61,703 crore during the first half of the current fiscal under short term policy scheme for exporters.
Under the covers issued to banks, over 26,000 accounts of exporters with more than 2,000 branches of banks were covered.