Export Credit Guarantee Corporation of India Ltd (ECGC), now beefed up with a higher equity base, has identified factoring services as a key future business growth area for the organisation. Labelled as ‘maturity factoring’, ECGC's new instrument is a slightly modified version of the traditional factoring service, and is operated with support and co-operation from banks.
Sounding confident that maturity factoring will gain popularity among the exporters in days to come, Mr P.M.A. Hakeem, CMD of ECGC, said that ECGC was actually supplementing the role of the banks. He said in maturity factoring, if payment does not come, the amount would be paid to the bank on the day immediately after crystallisation of the bill. Declaring it as a very safe product, he said in maturity factoring, unlike credit insurance, on the day of crystallisation of the bill, full payment would be made as per the exchange rate prevailing on that date.
