The Hindu Business Line : ECGC plans to set up factoring services arm

EXPANDING SCOPE OF SERVICES: Dr Christy L. Fernandez (right), CMD, ECGC, with Mr S. Prabhakaran, Executive Director, at a press conference in Mumbai on Monday. - Paul Noronha

Mumbai , Aug 7

Export Credit Guarantee Corporation of India (ECGC) plans to set up a subsidiary to offer full-fledged factoring services for exporters.

Dr Christy L. Fernandez, Chairman and Managing Director of ECGC, said that the corporation had appointed a consultant to study the proposal on the subsidiary.

"We will be setting up a subsidiary but the decision to do it independently or with a strategic partner is yet to be taken. The subsidiary should be in place by the end of the current fiscal."

The maturity factoring scheme currently offered by ECGC addresses the needs of exporters to avail themselves of pre-finance (advance) on the receivables for their working capital requirements.

This requires ECGC to have a bank partner, but with an independent subsidiary the corporation would be able to offer finance as well as insurance.

An ECGC official said that the capital base of the subsidiary could be around Rs 100 crore.

The only other company that offers export-factoring services is Global Trade Finance Ltd.

Mr S. Prabhakaran, Executive Director of ECGC, said that the corporation has set a target of Rs 700 crore in terms of premium by the end of the fiscal, up from last year's Rs 579 crore.