Some of the main factors which are the cause of concern for the exporters is the presence of political and commercial risks in their export process. The reason behind is that the realization of any of these risks will lead to non-payment of the price of exported goods and services. The failure to collect the receivables from foreign buyers on the due dates often puts the exporter in financial problems and as a result, the exporter will be unable to fulfill his financial obligations to domestic creditors and sometimes leads to his complete insolvency or bankruptcy.
In order to encourage exporters to develop their export activities and reduce their concerns in this field and provide them with the necessary coverage against political and commercial risks, governments are creating Export Credit Insurance Companies. Such insurance companies are mainly dependent on the governments' financial support and therefore, often cover the kind of risks that are usually not covered by commercial insurance companies because of their nature and size.
To gain this aim and to ensure the financial security for Iranian exporters and more importantly to reach the effective development of the country's exports (with a focus on the non-oil sector), Export Guarantee Fund of Iran was established in 1974 with the cooperation of UNCTAD as the only State-run and State-owned Export Credit Insurance Company, affiliated to the Ministry of Commerce (at the time of constitution which was later merged into the new Ministry )- Ministry of Industry, Mines and Trade. It started under the supervision of Iran Export Development Center (later transformed into Trade Promotion Organization).
However, the life of this newly established organization was not very long, because with the rise in oil prices as a result of political developments in the Middle East region in the mid-70s, the country's oil income increased, and this caused Export Guarantee Fund of Iran's role to be undermined and neglected and the Fund's activities came to a complete stop. After the victory of the Islamic Revolution in the country, with a change in the macroeconomic policies of the government, Export Guarantee Fund of Iran, as an organization affiliated to the Ministry of Industry, Mining and Trade, with an independent legal and financial entity was reestablished and started its activities again in 1994 to help the exporters recover their business position which has deteriorated under the effect of 8 years of imposed war to support and expand the increase of non-oil exports.
Moreover, apart from covering the political and commercial risks of exports for the Iranian traders, backed by full financial support of the government, the Fund also was mandated to help and facilitate the exporters' access to export financial resources needed as pre-shipment and working capital loans through the issuance of various types of credit guarantees in favor of Iranian banks and financial institutions.