Export Credit Agency - ECA

AAA

DEFINITION of 'Export Credit Agency - ECA'

A financial institution or agency that provides trade financing to domestic companies for their international acitivites. Export credit agencies (ECAs) provide financing services such as guarantees, loans and insurance to these companies in order to promote exports in the domestic country. The primary objective of ECAs is to remove the risk and uncertainty of payments to exporters when exporting outside their country. ECAs take the risk away from the exporter and shift it to themselves, for a premium. ECAs also underwrite the commercial and political risks of investments in overseas markets that are typically deemed to be high risk.

INVESTOPEDIA EXPLAINS 'Export Credit Agency - ECA'

There is no such thing as a typical export credit agency (ECA). ECAs come in a variety of forms; some are part of government departments and others are private companies. There are ECAs that only specialize in short-term credit business and others that only do long-term or medium-term business.

RELATED TERMS
  1. Balance Of Trade - BOT

    The difference between a country's imports and its exports. Balance ...
  2. Foreign Currency Effects

    The gain or loss on foreign investments due to changes in the ...
  3. Export

    A function of international trade whereby goods produced in one ...
  4. Import

    A good or service brought into one country from another. Along ...
  5. FAKO Score

    A derogatory term for a credit score that is not one of the FICO ...
  6. Credit Repair Organizations Act ...

    A federal law passed in 1996 that requires companies offering ...
RELATED FAQS
  1. What is the difference between consumer surplus and economic surplus?

    The consumer surplus is the difference between the highest price a consumer is willing to pay and the actual market price ... Read Full Answer >>
  2. What does it signify about a given product if the consumer surplus figure for that ...

    High consumer surplus for a particular product signifies a high level of utility for consumers and may carry some implications ... Read Full Answer >>
  3. What are common reasons for governments to implement tariffs?

    A tariff is a tax imposed by a governing authority on goods or services entering or leaving the country and is typically ... Read Full Answer >>
  4. How does mercantilism impede global economic growth?

    Mercantilism impedes global economic growth by leading producers to specialize in goods and services that do not take account ... Read Full Answer >>
  5. How do "factor endowments" impact a country's comparative advantage?

    Factor endowments impact a country's comparative advantage by affecting the opportunity cost of specializing in producing ... Read Full Answer >>
  6. What does 'Incoterms' mean in relation to Ex Works (EXW) trades?

    Ex works is part of the published Incoterms and outlines the obligations of transportation to buyers and sellers. The International ... Read Full Answer >>
Related Articles
  1. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  2. Options & Futures

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
  3. Forex Education

    Global Trade And The Currency Market

    Learn how the Bretton Woods system got the ball rolling for world trade.
  4. Bonds & Fixed Income

    6 Factors That Influence Exchange Rates

    Find out how a currency's relative value reflects a country's economic health and impacts your investment returns.
  5. Economics

    In Praise Of Trade Deficits

    When a country imports more than it exports, is it a recipe for disaster or just part of a larger cycle?
  6. Economics

    Overseas Investing No Protection Against Downturn

    The U.S. economy affects many other countries. Find out what this can mean for overseas investments.
  7. Economics

    What is a Capital Account?

    Capital account is an economic term that refers to the net change in investment and asset ownership for a nation.
  8. Economics

    Understanding the Fisher Effect

    The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.
  9. Investing

    The Labor Market Recovery’s Missing Ingredient

    Job creation is running at the fastest pace since the 90s, and there is some evidence that wage growth is finally starting to accelerate, albeit modestly.
  10. Economics

    Gambling on Macau: Too Risky?

    Macau was once heralded as the new Las Vegas for casino investors. Is it too late?

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center