Payment from debtors acts as fuel to engine which keeps the business running. Even one big default can shake the financial stability of a company.
Future is not predictable specially now a days when Economy is highly uncertain. Post COVID demand for credit transactions have increased, debtors are seeking longer credit period resulting in higher exposure and a long lasting customer relationship cannot be the best grounds for ensuring business profitability. The essential value of trade credit insurance is that it not only protect default by debtors but also provide peace of mind to the supplier, who can be assured that their trade is protected, it also gives valuable market intelligence on the financial viability of the supplier’s customers, be it old or new .
Recently , The Insurance Regulatory and Development Authority of India have issued revised guidelines for Trade Credit Insurance On Sep 8 2021, which will be effective from 1st Nov 2021. Insurers, other then ECGC may have these products for export and domestic credit insurance.
The aim is to promote the sustainable and healthy development of the trade credit insurance business and improve economic stability by labelling trade losses because of credit risks. ECGC Ltd is exempted from application of these guidelines.
Key highlights of the revised guidelines are:
- Goods rejected by buyers which were exclusively manufactured as per the requirements of the buyer and cannot be sold elsewhere. This is very useful insurance protection for tailor made products
- Earlier only whole turnover policy options was there, but now considering the evolving insurance risk needs of MSME’S – policy can be Customised by providing Cover for individual buyer only. This is quite similar to ECGC product for export
- Project covers – Extension of coverage to contractors to protect their receivables against principal will aid the infrastructure / industrial Sector for long term projects
For more, details you may contact undersigned
Ms. Ayushi Gupta , Manager
Contact details :+91 7573011546
Email : ayushi.gupta@beacon.co.in
Mr. Rajender Mogili, Deputy Manager
Contact details :+91 6357363254
Email : rajender.mogili@beacon.co.in
Mr, PK Pattanayak, Chief Operating Officer
Contact details : +91 968762389
Email : pattanayak.pk@beacon.co.in