financial guarantees exporters require adequate


FINANCIAL GUARANTEES: Exporters require adequate financial support from banks to carry out their export contracts; ECGC's guarantees protect the banks from losses on account of their landings to exporters. These guarantees have been designed to encourage bank to give adequate credit and other facilities for exports, both at pre-shipment and post-shipment stages, on a liberal basis.

Six guarantees have been evolved for [he purposes:

1) Packing Credit Guarantee

2) Export Production Finance Guarantee

3) Post-Shipment Export Credit Guarantee

4) Export Finance Guarantee

5 ) Export Performance Guarantee

6) Export Finance (Overseas Lending) Guarantee

These guarantees give protection to banks against losses due to non-payment by exporters on account of their ill solvency or default. ECGC pays three-fourths of the loss in the case of Post-Shipment Export Credit Guarantee, Export Finance Guarantee, Export Performance Guarantee and Export Finance (Overseas Lending) Guarantee and two-thirds of the loss in others.

The Corporation agrees to pay higher percentage of loss to banks which offer to cover all their pre-shipment advances under a Whole turnover Packing Credit Guarantee. Similarly a  higher percentage of cover is offered under Post-Shipment Export Credit Guarantee if the bank agrees to cover all its post-shipment advances on whole turnover basis.

In the case of' export Performance Guarantee and Export Finance (Overseas Lending) Guarantee, ECGC provides higher cover of 90 per cent of the loss on payment of proportionately higher premium

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Marketing Management: financial guarantees exporters require adequate
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