, MH India (PressExposure) June 25, 2009 -- The Export-Import Bank of India (Exim Bank) is set to receive an international trade fund worth $60 million to enable it extend necessary support to export-oriented SMEs, which have been worst-hit by the global economic deceleration. The trading facility is expected to enhance Exim Bank's ability to provide short-term financial aid to small businesses.
"The international trade facility provided to Exim Bank is a positive sign for the SME export sector since it can now enjoy easier access to funding from the bank. Following the availability of this facility, Exim Bank will provide competitive trade finance with a special focus on SMEs," said D Dasgupta, financial analyst at CMC.
The trade facility will be equally shared by the International Finance Corporation (IFC), which is a member of the World Bank group, and Bank of Tokyo-Mitsubishi UFJ. IFC and G-NEXID -- an organisation of emerging-market export credit agencies and development institutions aimed at encouraging trade between developing countries -- has already signed a memorandum of cooperation in May, following which the transaction will take place.
"The extension of the financial support to Exim bank will also encourage other lenders to resume their lending operations in the Indian market and prompt them to provide short-term foreign-currency trade finance to cash-strapped export units," said A Goyal, proprietor of RK Securities, a small-scale trading house and equity broking firm in Kolkata
The provision of trade finance to Exim bank has provided succour to the beleaguered SME export sector, which is suffering due to the drying up of foreign currency financing amidst the ongoing global financial crisis.