EGFI to Assist Virus-Hit Businesses

The Export Guarantee Fund of Iran, the state-owned export credit agency, has raised the ceiling of its coverage to help support businesses affected by the COVID-19.

As per a press release, the EGFI now guarantees 100% of political risks. The cover for commercial risks will be up to 95%.

Before the new measure, the ceiling was 95% for political risks, and 90% for commercial hazards.

EGFI’s board also expanded the credit cover for foreign firms buying Iranian goods, and the ceiling for credit lines allocated to Iranian exporters of non-oil goods.

The fund's board also offered grace periods for guarantees that have already matured.

Iran added 1,499 patients to the number of infections on Friday, with the number reaching 79,494. The total number of lives lost to the virus is 4,958.

The outbreak of the virus and government's restrictive measures to contain its spread has had a major negative impact on businesses across the board and the national economy. Estimates show 15% of Iran’s economy will be affected by the deadly virus. Market analysts say the harm would be higher as recession sets in and people prefer to be more careful with their money in time of crisis.

The state-owned agency, affiliated to the Ministry of Industries, Mining and Trade, is in charge of supporting domestic non-oil exporters by providing export guarantees and risk insurance.

Fighting US Restrictions

To cope with the harmful effects of US restrictions on Iran’s foreign trade, the EGFI has outlined a plan of action. It said it wants to expand insurance cover capacity for exporters from the previous $2 billion to $2.3 in the current calendar year.

It also plans to issue export credit guarantees worth $700 million with priority to trade with Eurasian countries.

Among other things, the fund has a mandate to cover risks pertaining to export of technical and engineering services, facilitating conditions for trading goods and commodities at the Iran Energy Exchange and Iran Mercantile Exchange and cooperating with peer funds to design credit instruments that can replace banking guarantees due to the US sanctions on the banking industry.

EGFI covered a range of export risks, including export insurance and credit guarantees, worth $2.6 billion during the last fiscal year that ended on March 19.

This was up 20% compared to the year earlier, according to a report on the fund’s yearly performance posted on its website.

Short term insurance cover amounted to $1.2 billion, representing 46% of the total cover provided to non-oil exporters last year – up 42% annually.

Likewise, the short-term and mid-term cover reached $834 million to post a yearly 16% rise.