The Export Credit Guarantee Corporation of India (ECGC) will be offering direct factoring facility for micro, small and medium enterprises (MSMEs).“We will be launching this service in the second quarter of the current financial year,” N Shankar, Chairman and Managing Director, ECGC, said at the inaugural function of a branch premises recently.
This would help small enterprises to meet their working capital requirements without approaching banks, he added. Factoring is a cash management tool in which an enterprise/business person sells accounts receivable at a discount to a third party funding agency to raise capital.
Focus on MEMEs was vital for export promotion as they contribute about 40-50 per cent of total exports, the CMD said. The corporation had recently introduced a new country-risk rating for the benefit of MSMEs.ECGC, which has 62 branches now, would be opening three new branches in Chennai, Ahmedabad and Kollam soon.