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MEP is an exposure based Policy.
Policy For SME Sector
ECGC introduced a Policy exclusively for the SME sector units in 4th July, 2008. It had undergone a modification and was rechristened as Micro Exporters Policy (MEP) in 2014 by making the product more attractive with improved cover. MEP is an exposure based Policy.
a. Commercial Risks
I. Risks covered on the overseas buyers:
Insolvency of the buyer.
Failure of the buyer to make the payment due within a specified period, normally 2 months from the due date.
Buyer's failure to accept the goods, subject to certain conditions.
II .Risks covered on the L/c opening Bank
Insolvency of the L/c Opening bank
Failure of the L/C opening bank to make the payment due within a specified period normally 2 months from the due date.
b. Political Risks
Imposition of restriction by the Government of the buyer's country or any Government action, which may block or delay the transfer of payment made by the buyer.
War, civil war, revolution or civil disturbances in the buyer's country. New import restrictions or cancellation of a valid import license in buyer's country.
Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer.
Any other cause of loss occurring outside India not normally insured by general insurers, and beyond the control of both the exporter and the buyer.
The features of the MEP Policy are as under
Features of Micro Exporters Policy (MEP) at a glance No. Particulars Details
Policy period : 12 months
Processing Fees : Rs.1000
Minimum Premium : Rs 25000
Maximum Loss Limit : Rs.15 lacs
Single Loss Limit : Rs. 5 lacs
Report of overdue : more than 60 days from the due date
Waiting period : 2 months from the due date or extended Due date
Percentage of cover : 90%
All exporters including Traders, Manufacturers and Service providers, irrespective of MSME Certificate, shall be eligible for the Policy subject to their export turnover up to Rs.100 Lakh.
