EghtesadOnline: The Export Guarantee Fund of Iran, a state-owned export credit agency, issued $1.7 billion worth of guarantees for exporters of non-oil goods in the first nine months of current fiscal that ends in March, up 62% compared to the corresponding period last year, the EGFI chief said.
Afrouz Bahrami told IRIB news agency that the value of export guarantees is predicted to reach $2 billion by the yearend.
Pointing to EGFI’s mission to help shield non-oil exporters against US sanctions, Bahrami said the fund offers insurance for political and commercial risks.
“In light of the new US sanctions and the limitations of local banks in issuing [export] guarantees, the fund is willing and able to cover political and commercial risks for exporters in the framework of new insurance packages,” Financial Tribune quoted her as saying.
Recalling that the average global insurance coverage for export is 10%, she said the fund will reach that threshold by the end of the Sixth Five-Year Economic Development Plan in 2022.
She referred to East Asian nations like Japan, China, India, and South Korea as successful models in export credit systems that Iran should follow, calling on the government and parliament to boost the financial power of the fund.
She said EGFI is one of the supporting pillars of the export sector besides other organizations like the Trade Promotion Organization, National Development Fund of Iran and the Export Development Bank of Iran, saying that all the bodies are working in tandem to implement the support packages designed to ease problems plaguing non-oil exports.
The packages includes facilities to help marketing and launching centers for selling domestic products in the target countries, offering export incentives, helping establish rail, air and sea transportation lines, paying a part of expenses for registering Iranian trade names in the target markets and boosting EGFI capital.
The CEO also pointed to export in cash as a deficiency of the export sector which she said creates a competitive advantage for rival exporters in other countries.
“Our exporters should consider deals on credit to increase competitiveness [instead of cash].”
The EGFI is concentrating on issuing guarantees for Iranian contractors in foreign countries, offering credit lines for buyers and purchasing debts of exporters, she was quoted as saying.