Improving the Role of Eximbanks/ECAs in the OIC Member States
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Export Guarantee Fund of Iran (EGFI)
Description:
The Export Guarantee Fund of Iran was initially established in 1973 as the first state-owned
export credit insurance entity. The decline in oil revenues in the early 1970s was preceded by the
devaluation of the US dollar and led to the establishment of EGFI, which aimed at covering
Iranian exports against political and commercial risks. Once oil prices recovered in the mid-70s
resulting in an increase in oil revenues, the EGFI was no longer relevant and was inactive for a
decade. In 1994, EGFI was revamped as an independent legal, financial and administrative entity
affiliated to the Ministry of Commerce to increase non-oil exports and to support local exporters
in building their businesses.
EGFI has a General Assembly which includes the Minister of Commerce, Minister of Finance,
Minister of Foreign Affairs, Minister of Industries, Head of the Plan and Budget Organization,
President of the Central Bank of the Islamic Republic of Iran, President of the Iran Export
Development Center and two members of Islamic Consultative Assembly. It also has a Board of
Directors comprised of five people who serve for five years and a Managing Director (proposed
by the Ministry of Commerce and approved by the General Assembly). The General Assembly
selects one of two principal inspectors and alternates for one-year period. EGFI implements
policy proposed by the supervisory body, the Ministry of Commerce, and approved by the
Council of Ministers.
One percent (1%) of CIF value of the goods from all private importers is collected in a
contingency reserve account, and the balance amount of the contingency reserve along with
annual net profit serve as source of funds for EGFI. If a deficit occurs, this is included in the
annual budget of the country. In fiscal year 2013-2014, EGFI received a capital increase from the
government of USD 200 million to help cover the significant claims that EGFI had to pay out.
EGFI offers standard Whole Turnover and single risk insurance to exporters and an L/C policy to
banks, as well as investment insurance in support of Iranian foreign investors and banks. It also
offers a range of guarantee products, in addition to consultancy services in law, international
sales contract conclusion, market research, countries or banks risk, foreign buyers’
creditworthiness assessment, trade techniques and connecting exporters to the related local &
international export entities. In 2003, an investment department was established to invest in
companies registered at Tehran’s Stock Exchange and in projects abroad, invest in non-oil export
promotion (including industry, agriculture, mines and services) in line with non-oil export
promotion and form partnership with banks in reinsuring credits.
EGFI has actively cultivated relationships with international groups with the purpose of
exchanging information and expertise with the Prague Club and Berne Union, participating in
COFACE’s Credit Alliance Network, preparing for membership in Aman Union and reinsuring
part of the Fund’s risk portfolio with ICIEC. In late 2014, EGFI signed a cooperation agreement
with EXIAR, the Russian ECA.
Analysis:
Since its re-launch in 1994, EGFI has a sought to become an active export credit insurer. The
latest figures available are from 2010, when EGFI insured USD 3.2 billion of new business, nearly