Exim Bank window offers 50% capital support to MSMEs

Our Bureau KOLKATA

EXPORT Import Bank of India (Exim Bank) has opened a special funding window for micro, small and medium enterprises (MSMEs) planning to export their products. The development bank has also mobilised the Grassroots Business Fund, a US-based not-for-profit organisation, to offer seed capital to MSMEs for building export units. The initiatives are in sync with the country’s thrust on MSMEs.

According to Exim Bank chairman & managing director TC Venkat Subramanian, the special funding window has been created recently to support export marketing initiatives taken up by MSMEs. Exim Bank will reimburse 50% of the project cost. The CMD, however, did not specify the corpus of the new facility.

“We will offer export marketing finance to MSMEs as a grant. The facility would boost the sector, which has been the government’s focus for quite sometime,” Mr Subramanian said on Wednesday on the sidelines of a ‘Trade & Logistics Symposium, jointly organised by Indian Institute of Foreign Trade (IIFT) and Confederation of Indian Industry. The Economic Times was print media partner for the event.

“We are also acting as facilitator for getting seed capital for MSMEs from the Grassroots Business Fund. The entity would take 20-25% equity in each MSME depending on the size of the unit,” the Exim Bank CMD said.

On the country’s overall export scene, he expected flat growth at 3% for this fiscal. In the inaugural session of the event, IIFT director KT Chacko underscored the need to improve transportation infrastructure in order to achieve sustainable export growth.

“In most of the state, there is no serious effort to improve transportation systems. Transportation cost is very high and this needs to be addressed. There is also largescale inefficiency in export logistics,” Mr Chacko observed.

He mentioned that since the export sector has created large-scale job opportunities, especially since 2004, export growth assumes that much importance for the country’s overall economic health.

In fact, the global economic downturn has impacted specifically the country’s textile and gems & jewellery sectors which are largely export-oriented. Yet, India’s export-GDP ratio is just about 15%, compared with the 30% ratio for China.

Task force soon to solve problems: PM

THE government will soon set up a task force to address problems of the micro, small and medium enterprises (MSMEs) sector, reports Our Bureau from New Delhi. MSMEs have been demanding availability of adequate financing and change in labour laws to facilitate the industry. Prime Minister Manmohan Singh has assured the industry that the task force would submit a report within three months, the industry officials said after meeting the PM on Wednesday. The industry representatives from small and medium scale companies have apprised the PM about the difficulties faced by the sector due to the global economic slowdown. “Prime Minster said that a task force will be formed to help the MSME sector,” Federation of Indian Micro, Small and Medium Enterprises (FISME) Chairman Suresh Mohan said. The MSME sector has also demanded setting up of an SME Stock Exchange to help raise finances easily to encourage product innovation and better risk management.

Courtesy: The Economic Times (August 27, 2009)