Piyush Goyal launches ‘Nirvik’ scheme to enhance loan access to MSMEs and exporters
Union Minister of Commerce and Industry and Railways Piyush Goyal on Monday shared details of a new Export Credit Insurance Scheme (ECIS) by Export Credit Guarantee Corporation of India (ECGC) named 'Nirvik', according to media reports. The scheme was first announced by Finance Minister Nirmala Sitharaman as part of new initiatives to boost exports.
Nirvik aims to make loans easier to access for exporters and also simplifies the lending process. The ECGC provides credit guarantee of up to 60 percent loss, but under Nirvik, the insurance cover guaranteed will cover up to 90 percent of the principal and interest of loans, and will include both pre and post-shipment credit.
Goyal was quoted by KNN India saying:
"If there is any loss, then in that case, ECGC will refund 90 percent to the banks, including principal and interest. Banks will get up to 50 percent within 30 days after the complaint is lodged."
Nirmala Sitharaman had said, "A Rs 1,700 crore annual dole will allow Export Credit Guarantee Corp (ECGC) to offer higher insurance cover to banks lending working capital for exports, she said. This will enable reduction in the overall cost of export credit including interest rate, especially for MSMEs."
Commenting on the measures, Connect2India founder and CEO Pawan Gupta had said that expanding the scope of ECIS to offer higher insurance cover is a step that should help MSMEs which are facing liquidity issues for exports.
Nirvik is expected to make Indian exports competitive and benefit MSME exporters with tax reimbursements, reduced insurance costs, and a ease of doing business.
The ECGC Limited is a company wholly-owned by the Government of India, and is based in Mumbai, Maharashtra. Controlled by the Ministry of Commerce, it provides export credit insurance support to Indian exporters. The Government of India had initially set up Export Risks Insurance Corporation in 1957, and it was transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee Corporation of India in 1983.
(Edited by Teja Lele Desai)