Mumbai, Jul 1 (KNN) The proposed factoring service by the Export Credit Guarantee Corporation (ECGC) would ensure 100 per cent credit risk protection against the overseas buyer and country to the MSME exporters and availability of non-recourse finance up to 85 per cent on receivables approved.
 
The factoring service scheme which would soon be announced is exclusively meant for Micro, Small and Medium Enterprises (MSMEs) and will include working capital facility without collaterals.
 
The other features of the proposed scheme include “constant follow up with the buyer for collection of payments saves time and cost,” an ECGC Official told KNN.
 
Those eligible for the service should have a good track record and should be exporting to the countries with top ratings, clubbed in as A1 and A2 countries.
 
Illustratively, A1 and A2 countries are Japan, New Zealand, Netherlands, Singapore, Oman, Mexico etc.
 
The ECGC service would result in benefits to the MSME exporters. They would be able to get finance without collaterals, improve their cash flow and will have reduction in administrative costs.
 
MSMEs contribute to 40 per cent of country’s exports.  They predominate in sectors such as pharmaceutical, garment, engineering and automobile components. (KNN/PC/SD)