It should be noted that even exporters in developed countries deal with their buyers on credit terms only after ascertaining their credit ratings from reputed credit information agencies.
ECGC is playing a vital role in underwriting risks on the overseas buyers under the policies issued to exporters by obtaining status reports on the buyers from credit information agencies, commercial banks, etc.
At present, ECGC has an arrangement with 28 such agencies throughout the world which are providing credit reports to it on overseas buyers from all over the world.
The ECGC experience shows that often exporters approach it for approval of credit limit at the last moment, or just before the date of shipment.
The exporter-clients want credit limit on the buyer immediately, and they sometimes even approach the Corporation after the shipment is affected.
It has been observed that exporters do not give ECGC reasonable time to obtain a report on the buyers and assess their rating.
In the absence of a report, it is difficult for the Corporation to underwrite commercial risk, though it has given certain powers to approve provisional limit on DA/DP basis within certain financial limits to its branch/regional offices on the basis of the exporter’s track record.
In view of this situation, ECGC urges exporters in their own interest to obtain a report on the buyers from one of the agencies with which ECGC has an understanding, and then apply for credit limit on the buyers to the concerned Branch Office, along with a copy of the said report.