ECGC plans to invest around Rs 3,500 crores to provide a cushion for traders to strike deals and help ECGC write mega risks and provide adequate cover to exporters.
The export credit company has requested the government to exempt it from paying dividend till it reaches Rs 5,000 crores of authorized capital, from Rs 1,500 crores now.
“We expect Rs 3,500 crores in the next 3-4 years from the government,” said Geetha Muralidhar, CMD of ECGC. “The government has now taken up the issue, and the matter is going to the Cabinet. We have requested the government to exempt us from (paying) dividend until we reach Rs 5,000 crores of authorized capital.”
In 2016-17, ECGC supported 15 per cent of total merchandise exports. Capital infusion will help the company support exporters in difficult markets like Africa and Latin America.
“Enough capital is not been given and so we are growing at Hindu rate of growth,” said Muralidhar.”We had turned down covers, denied covers for some countries because of lack of capital.”
“We are un able to write mega size covers,” she said. “We want to back bank lending. We have clamped down on our bank support and have reduced our cover to 50 per cent for large risks.”
ECGC has capacity support from 78 reinsurers. The company has net worth of Rs 3,600 crores and can take risk of up to 5 % of the net worth. There are some Indian exporters who require $250-300 million.
