Exim Bank to ease export struggles of smaller firms

Smaller enterprises struggling to crack export markets, especially in some of the poorest countries, may find it easier in the future, with the Exim Bank of India working on a model to smoothen export finance for them.

- Puja Das

NEW DELHI:

Indian lenders, unsure of importers and banking systems in so-called least developed countries (LDCs), are often hesitant to fund Micro, Small and Medium Enterprises (MSMEs) shipping to such nations.

The Centre has now asked Exim Bank to design a model to assess the risks faced by banks involved in such exports and finance them, two people aware of the matter said.

The model will aim to promote exports by MSMEs and protect them from payment defaults.

According to one of the two officials cited above, MSME exporters face a twin problem of availability and cost of finance.

While the government's 3% interest subsidy for MSMEs brings down loan costs, availability of finance itself remains a problem.