New Delhi, June 5 (IANS) The Export Credit Guarantee Corporation of India (ECGC) on Friday said it will clear all pending claims of apparel exporters in the next four months, even as it faces an exposure of Rs 100 crore in UK's Laura Ashley and USA's J.C. Penney, two large retail store chains that have gone bankrupt.
“We are working under pandemic-related restrictions. But we are trying our best and we plan to clear all pending claims in four months' time,” M. Senthilnathan, CMD, ECGC, said in a webinar organised by the Apparel Export Promotion Council (AEPC) on ‘Managing Trade Credit under the Covid-19 Pandemic Situation'.
Responding to AEPC Chairman A. Sakthivel's query on claims, Senthilnathan said that the exporters should share all their documents and correspondences with their international buyers in one go for quick processing. If the transaction size warrants, the ECGC may have to engage in a legal pursuit of payment, he added.
Senthilnathan said that the insolvency rates are high in developed economies and is going to shoot up sharply due to the pandemic's impact on GDP growth, which is negative for most of the developed world, and has hurt medium and small enterprises in particular and also some large enterprises.
“Already, we have got two large retail stores going for bankruptcy and where our exposure is close to the tune of Rs 100 crore. Claims are yet to be filed by the exporters but we have got information that the buyers have gone insolvent,” he said.
Right now all the buyers and most part of the world is affected due to Covid containment measures, he said, adding that the ECGC recognises that the situation calls for some credit accommodation and credit insurers need to take higher risks.