EghtesadOnline: The Export Guarantee Fund of Iran, the main export credit agency, says it doubled credit and insurance services to exporters in the first five months of the current fiscal year (March 20- August 21).
In a report posted on its website, the credit agency said EGFI penetration grew to 10% in the first five months of the year, compared to the average 5% over the past few years.
“Export cover penetration is now on par with penetration rate of credit agencies in developed countries,” the report said.
It added that the EGFI realized the 10% penetration three years sooner than previously envisioned as per the provisions of the Sixth Five-Year Economic Development Plan (2016-21).
Total export value in the period stood at $10.87 billion, $1 billion of which was covered by the EGFI. "EGFI provided the needed cover to help expand the export market under sanctions”.
It said the achievement was realized despite the hostile US economic sanctions and the harm it is doing to Iran’s foreign trade.
EGFI covered export risks worth $2.6 billion in the last fiscal year that ended in March -- up 20% compared with a year earlier.
Short-term insurance cover amounted to $1.2 billion, representing 46% of the total cover to non-oil exporters.
Apart from increasing penetration, the EGFI said it devised support packages to curb the impact of the sanctions and also mitigate the detrimental impact of coronaviruses outbreak on foreign trade.
Iran’s export sector has been hit hard by the deadly virus as many border crossings were closed during the initial weeks of the coronavirus breakout in March.
To improve its ability to cover export risk, the EGFI in June was allowed to boost its capital. The High Council of Economic Coordination, an ad-hoc body comprising heads of three branches of power, gave the okay.
The top council agreed to increase EGFI capital threefold by adding $200 million. The agency’s capital until recently was $100 million, which hardly accounted for 2% of the total goods export. Funding for capital increase was procured from the National Development Fund of Iran, the sovereign wealth fund.