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By Mayashree Acharya


Updated on: Apr 29th, 2022


5 min read

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India’s exports contracted by 1.8% in December 2019 for the fifth month in a row, due to which the exporters raised concerns over credit availability. Thus, the Finance Minister announced the NIRVIK scheme (Niryat Rin Vikas Yojana) scheme while presenting the Union Budget 2020-21 to boost the export segment of the Indian economy.

The NIRVIK scheme is implemented under the Export Credit Guarantee Corporation of India (ECGC) to enhance credit availability to small-scale exporters and ease loan lending. It aims to provide high insurance coverage for exporters, reduce insurance premiums for small-scale exporters and simplify procedures for claim settlement. It will lead to higher export credit disbursement.

Objectives of the NIRVIK scheme

  • It facilitates high credit disbursement for small exporters and helps them export at a higher level.
  • It offers an insurance cover to small exporters to expand their businesses.
  • It gives a chance to small exporters to reduce their policy premium.
  • It simplifies the claim settlement process making it easy for exporters to work.
  • It facilitates a business-friendly environment leading to job creation.
  • It helps small exporters to enhance export and grow their small scale export businesses to a large scale.

Features of the NIRVIK scheme

  • Provides insurance cover up to 90% of the principal and interest amount.
  • Insurance cover includes both pre and post-shipment credit.
  • The extended coverage will ensure that Foreign export credit interest rates are below 4% and the Rupee export credit interest rates are below 8%.
  • Jewellery, gems and diamond sector borrowers with a limit of above Rs.80 crore will have a higher premium rate than those from other sectors since the loss ratio is high.
  • The premium rates will be 0.60 per annum for exporters having account limits below Rs.80 crore. 
  • The premium rates for exporters whose account limits are beyond Rs.80 crore will be 0.72 per annum.
  • Where the losses exceed Rs.10 crore, the bank documents and ECGC officials will be subjected to inspection, and the banks should pay a monthly premium to the ECGC on the principal and interest.

Eligibility Criteria for the NIRVIK scheme

  • Only small exporters are eligible to apply for the NIRVIK scheme.
  • Small exporters must be Indian citizens having an export business.
  • Small exporters should have a bank account.

Benefits of the NIRVIK scheme

  • The NIRVIK scheme plays a crucial role in improving the affordability and accessibility of credit for exporters.
  • It will dispense the procedural hurdles and become exporter friendly.
  • The extended insurance cover will bring down the cost of credit due to factors such as better liquidity, capital relief and quick settlement of claims. 
  • It will benefit the MSMEs (Micro, Small and Medium Enterprises) due to simplified procedures and improvements in the ease of doing business.
  • It offers more liquidity due to the continuous availability of working capital and instant claim settlements for export production.
  • It facilitates the Indian exports to be competitive in international and national markets.
  • It offers reduced tax reimbursements and insurance costs to enhance credit loans and productivity.
  • It ensures that the foreign and domestic exchange rates remain less than 4% and 8%, respectively.
  • It minimises the risk of non-payments. 

However, the Ministry of Finance is yet to launch the scheme. After the cabinet approves the scheme, the scheme application process for obtaining its benefits will be announced by the government.

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About the Author

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more


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