Export Credit Agency - ECA

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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.

BREAKING DOWN '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.

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