Organizations Covering Credit Risk
There are more than 40 organizations providing cover for credit risk, the world over. They are all members of a union International Union of Credit and Investment Insurers’ also popularly known as the BERNE UNION, In most countries, these organizations are government controlled through a few of them are privately owned. In India, we have the ‘Export Credit Guarantee Corporation of India Limited’ (ECGC) to cover export credit risks. ECGC is a Government of India enterprise.
In the very first decade of Independence of India, the Indian Government realized the importance of promoting exports. Some organizations were set up for this purpose. It was felt that one of the serious handicaps faced by Indian exporters is the risk that they might not get paid for the shipments made by them. In fact, it acted as a serious deterrent to our export efforts.
It was in July 1957 that the Indian Government set up the Export Risk Insurance Corporation of India (ERIC) with its Head Office in Bombay. In the course of time, the ERIC started providing various guarantees to bankers providing export finance. It was, therefore, decided in 1964 to rename the Corporation as ‘Export Credit and Guarantee Corporation Limited.’ To bring the Indian identity into sharper focus, the corporation’s name was once again changed in 1983 to ‘Export Credit Guarantee Corporation of India Limited,’ (ECGC). ‘The ECGC is a company wholly owned by the Government of India. It functions under the administrative control of the Ministry of Commerce and is managed by a Board of Directors representing Government, Banking, Insurance, Trade and Industry, etc.