Professional Documents
Culture Documents
ECGC
ECGC
Credit Risks
ECGC BACKGROUND
•Established in 1957
•Administrative control of Ministry
of Commerce & Industry “ TO SUPPORT THE INDIAN EXPORT
Goods Receivables
Hedging by Credit
Marine
Authorized Insurance
Insurance
Dealers
What is Trade Credit Insurance?
Advance Payment
Letter of Credit
FAILURE TO TAKE
DELIVERY
DP INSOLVENCY OF BUYER
NON-PAYMENT
DA
PAYMENT DELAY/
PART PAYMENT
TAKES DELIVERY WITHOUT
OD PAYMENT
DISCREPANCIES RAISED
INSOLVENCY OF
LC OPENING BANK
ECGC FINANCIAL PERFORMANCE
1283
1240 1247
1200
1107
1075 1062
1036
1013
1000
800
687
600
409
400
200
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Risk Protection
• Prevents disrupting losses to one of Sales Expansion
the company’s largest, unprotected
assets • Expand Sales into Riskier or
• Reduction of Risk of Key Account New Markets
concentration levels • Grow with Existing Accounts
• Caps Exposure to Bad Debt Loss • Enhance a Customer
Relationship
Other Advantages
ECGC
Exporters Banks/FIs
•Providing Overseas
•Finance, credit
Factoring Investment Insurance to
risk cover on buyer, Exporters - Indian
collection of bills Entrepreneurs in Overseas
and maintaining of Ventures (Equity/Loans)
sales ledger
Risks Covered by ECGC
CREDIT RISK
Political Commercial
Risk Risk
12
Risks Covered by ECGC
Commercial Political
Risks Not Covered
Risk Risk
War, Civil War,
Insolvency Internal
disturbances ×Risks of loss due to
commercial or quality disputes
Protracted
Exchange
transfer ×Insolvency or default of any
Default blockage agent of the exporter or of the
collecting bank
Non Diversion of ×Loss or damage to the
Acceptance of voyage goods which can be covered
goods
by general insurers
Default of the Import ban ×Exchange Rate Fluctuation
LC opening
bank
restrictions etc ×Failure of the exporter to
fulfil the terms of the contract
Insolvency of or negligence on his part
the LC opening
bank
Country underwriting
Category 2: Countries where Specific Approval will be given on case to case basis on merits
Valid for six months
Normal waiting Period of 4 months
Only 11 countries under this category:- North Korea, South Sudan, Sudan, Syria ,Palestine
Venezuela, Afghanistan, Eritrea, Yemen, Western Sahara , Zimbabwe
Role of Buyer risk underwriting
• Credit risk insurance underwriting is the process of risk assessment
of buyer and evaluation of the proposal in terms of nature of
underlying transactions, insurable interest, selection of risk-claim
premium experience for sector, commodity etc.