Export-Import Bank of India:

A Presentation
AHMEDABAD : May 31, 2008

Exim Bank of India

EXIM BANK

SET UP BY AN ACT OF PARLIAMENT IN SEPTEMBER 1981

WHOLLY OWNED BY GOVERNMENT OF INDIA
COMMENCED OPERATIONS IN MARCH 1982
APEX FINANCIAL INSTITUTION
OBJECTIVES:
for providing financial assistance to exporters and importers, and for
functioning as the principal financial institution for coordinating the working of
institutions engaged in financing export and import of goods and services with
a view to promoting the countrys international trade
shall act on business principles with due regard to public interest
(Export-Import Bank of India Act, 1981)

Evolving Vision
Product Centric
Approach
Export
Credits
1982-85

Export Capability
Creation

EXIM BANK

To develop commercially viable

relationships with a target set of
externally oriented companies by
offering them a comprehensive range of
products and services, aimed at
enhancing their internationalisation
efforts

1986-94

Comprehensive Range of
Customer Centric
Products And Services
Approach
All Stages of the Export Business Cycle
Exim Bank TODAY
Leadership and Expertise in Indias Export Finance

Organisation
EXIM BANK

BOARD OF DIRECTORS (16)*

Chairman and Managing Director
5 Directors: Government of India

OFFICES IN INDIA
HEAD
OFFICE
Domestic
Offices

MUMBAI
9

3 Directors: Scheduled Banks

4 Directors : Professionals/Experts
1 Director nominated by RBI

Appointed
by
Govt. of India

Delhi
Chennai
Hyderabad
Pune

OFFICES OVERSEAS

1 Director nominated by IDBI

1 Director nominated by ECGC

Mumbai
Kolkata,
Bangalore
Ahmedabad
Guwahati

Overseas
Rep. Offices

Washington D.C.
Singapore
Johannesburg

* As per Exim Bank Act

London
Dubai
Dakar

Operational Philosophy

EXIM BANK

International Trade

Financing

Promoting

Facilitating

Through
Variety of Financing
Programmes

Value Added Business

Advisory Services

Research &
Analysis

Catalyst for Financing

Projects

Products

Services

Range of Products & Services

At All Stages of Export Business Cycle

Export
Marketing

PreShipment

Export
Production

Value Based Services to Exporters

Advisory
Services

PostShipment

Export
Product
Development

EXIM BANK

Knowledge
Building

Investment
Abroad

INFORMATION
Import
Finance

Advisory
Services
SUPPLEMENTS FINANCING PROGRAMMES

FINANCING, FACILITATING INDIAS TWO WAY TRADE & INVESTMENT

Financing Programmes
EXIM BANK

Financing Programmes (Various Currencies)

Export Credit
Medium / Long Term
- Lines of Credit
- Buyers Credit
- Suppliers Credit

Short Term
- Pre/Post Shipment
Credit

Import Credit
- Import Loan for
capital goods
- Bulk Import Loan for
Raw Materials

Loans for Exporting Units

- Term Loans for expansion/
diversification/ new projects/
export product development/
export marketing/ research &
development
- Term Loans for overseas equity
investment
- Direct equity stake in Indian/
Overseas ventures of exporting
companies

Lines of Credit Programme

EXIM BANK

Lines of Credit (LOCs) (Long term)

Exims own LOCs to economically
strong developing countries and
regional development banks

At behest of GOI, concessional LOCs to

developing countries in Asia/ Africa/ Latin
America with a long-term perspective.
While Exim raises the resources and
funds disbursement, GOI guarantee and
provide interest equalisation support
under India Development Initiative

Status of LOCs
No. of LOCs operative

86

No. of countries covered

85

Total amount of LOCs sanctioned

US$ 2.83 billion

Project & Services Exports

EXIM BANK

Promoting Project Exports

Exports of projects and services, broadly categorised into Civil engineering
construction projects, Turnkey projects, Consultancy services.
Over the past two decades, increasing number of contracts have been secured by
Indian companies in West Asia, North Africa, Sub Saharan Africa, South & South
East Asia, CIS and Latin America.
Such projects have supplemented the efforts of the host country governments in
achieving their developmental objectives.
Projects Currently Under Execution with Exim Bank Support
No. of Contracts

: 189

Value of Contracts

: US$ 11.5 bn

No. of Countries

: 35

No of Indian companies : 41

10

Promoting Investment
Supporting overseas investment
Term loans for equity investment overseas by Indian corporates
Term loans to overseas WOS / JV
Term loans for overseas acquisition by Indian corporates
Direct equity stake in overseas ventures of Indian corporates
Select overseas investments financed during the year (focus on mid-caps):
Jain Irrigation Systems Ltd (Israel)
Foods Fats & Fertilizers Limited (Ghana)
Alucast Auto Parts Pvt Ltd (Germany)
Vijai Electricals Limited (Brazil)
Welspun Tubular LLC (USA)
Rain Calcining (USA)

EXIM BANK

11

Overseas Investment Finance

EXIM BANK

Snapshot of Overseas Investment Finance (as of 31st Dec 2007)

No. of companies supported

170

No. of ventures supported

208

No. of countries

60

Loans sanctioned

Rs. 8328 cr

Loan Portfolio as of now

Rs. 2757 cr

12

THE SME SECTOR

GLOBAL PERSPECTIVE
SMEs Important segment of economy in developed as well as developing countries.
In OECD countries, SMEs account for over 95% of firms and 60-70% of employment.
In Asia SMEs account for 60% of capital investment, 60% of employment, 50% of
GDP, 35% of exports .
SME Definition: Based on investment in plant & machinery, nos. of people, turnover etc.
Entrepreneurship Development
Generation of Employment

Flexibility to Adapt to Changing Environment

Input Supply to Large Enterprises

Better Resource Utilisation

Balanced Regional Development.

Exports

13

INDIAN SME SECTOR

INDIAN PERSPECTIVE
SMEs contribute approx. 40% of Indias domestic production, around 35%
of total exports, 80% of Industrial employment, largest manpower employer
overall after agriculture.
SMEs are mostly in unorganised sector and source of livelihood for
millions. Have a greater social contribution than economic contribution.
SME Constraints: Financing, Infrastructure, Taxes & Regulations,
Marketing, Technology and Human resource
In view of strong local presence, SME growth is essential for countrys
development. SME Units grow eventually to medium and large enterprises
and SME promotion therefore becomes a major area for policy focus.

14

INDIAN PERSPECTIVE : CONTINUED

Micro, Small and Medium Enterprises Development Act (MSMED ACT): GOI enacted the
act in June 2006 and it came into force from October 2006. Inclusion of service sector in the
ambit of MSME. Promotion and development of SMEs, setting up appropriate legal &
regulatory framework, removing barriers to competition & trade, facilitating investment and
trade by strengthening the framework governing the policy, credit facilities, grants, development
of skill in employees, cluster development and developing of SME policy, regulatory and
financing framework.
Definitions: Based on Investment in Plant & Machinery
MICRO
SMALL ENTERPRISE
MEDIUM ENTERPRISE

MANUFACTURING
Upto Rs.25 lakhs
> Rs.25 lakhs & <=Rs.5 crores
> Rs.5 crores & <=Rs.10 crores

SERVICES
Upto Rs.10 lakhs
>Rs.10 lakhs & <=Rs.2 crores
> Rs.2 crores & <=Rs.5 crores

SME Rating Agency of India (SMERA), joint initiative by SIDBI, Dun & Bradstreet, CIBIL and
several leading banks in the country. It is an independent, 3 rd party assessment of overall
condition of the SME. Takes into account SMEs financial condition and several qualitative
factors that have bearing on credit worthiness of the SME.
Benefits: Wide Recognition and Acceptance, Favourable borrowing terms & faster access to
credit, Adds credibility, Benefits to banks.

15

INDIAN SME SECTOR

DOMINANT IN MAJOR SECTORS
Certain vibrant export sectors in India are dominated by SME Sector. e.g.
Engineering (33% of exports are from
SSIs)
Chemicals (33%)
Pharmaceuticals (44%)
Leather (70%)

Processed Food (70%)

Marine Products (47%)
Sports Goods (100%)
Readymade Garments
(90%)
Apparel

Growth of industries in the small scale sector in India has contributed to

the overall growth or the Gross Domestic Product as also in terms of
employment generation and exports.

16

INDIAN SME SECTOR

SME FINANCING : EXTERNAL ISSUES
GOI POLICY PACKAGE FOR SMEs:Government of India has announced
policy package for stepping up credit to SMEs. The main objective of the
package is to double the flow of credit from the level of Rs.67,600 crores in
FY04-05 to Rs.1,35,000 crores by FY09-10 to the SME sector.
Public sector banks to achieve a minimum 20% y-o-y growth in credit to the
SME sector & to follow a transparent rating system with cost of credit linked to
credit rating of the enterprise.
Exim Bank: The Bank is targeting to grow its SME portfolio at a CAGR of 30%
as against the growth target of 20% set by GOI. Currently SMEs constitute
around 20% of the Banks portfolio.

17

INDIAN SME SECTOR

Challenges in Credit Delivery
Access to Information
Financial Statements
Constitution of the Business Entity
Hand Holding
Security
Monitoring Issues

18

Exim Bank and SMEs

BUSINESS IMPERATIVES
Higher Interest Spread for SMEs
Focus Area, as with all banks
Early Client Acquisition
Diversification of Portfolio
Policy Framework (Enhanced Credit Flow to SME Sector)
Definition of SME: As per GoI/RBI guidelines.
SME Group: Handling business proposals from Rs.5 lakhs to Rs.25 crores,
mostly under PEFP, EOU, Pre-shipment/Post-shipment facilities.

19

Exim Bank and SMEs

FINANCING NEEDS OF SME EXPORTERS

Pre-shipment/Post-shipment Finance/working capital

Forfaiting
Buyers Credit
Suppliers Credit
Import Financing for raw materials
Finance for setting up production facilities
Financing R&D
Financing cost of setting up JV/Warehouse overseas
Financing quality related expenditure
Financing export marketing related expenditure
Insurance against default of the Importers

20

Exim Bank and SMEs

JOINT INITIATIVES

MOU was signed with ITC Geneva, to implement the Enterprise Management
Development Services (EMDS) programme of ITC for supporting SMEs in their
globalisation efforts. ITC and Exim Bank have jointly implemented a financial
model to appraise loan proposals of SMEs. The model seeks to evaluate SMEs
based on future potential as against past financials thus facilitating credit flow to
deserving SMEs.

MOC signed with Small Industries Development Bank of India (SIDBI) for
cooperation in SME sector funding.

21

Exim Bank and SMEs

EXIM BANK

EMS & Skill Upgradation for SMEs

Exim Bank Supporting exports from Rural Grassroots Enterprises
Export Marketing support given for finding international market for products of rural
industries produced by SHGs / NGOs in different states.
Exims network of overseas offices play a proactive role.

Export Marketing Services programme

Seeks to help Indian SME sector to establish their products overseas and enter new
markets through Exims overseas offices and MOU partner network
No upfront fees, but operates on success-fee basis

Eximius Centres of Learning in Bangalore/ Pune/ Ahmedabad for knowledge

building & capacity creation for SMEs

22

Grassroots Business Initiative

EXIM BANK

Linking rural industries to global market

Creation of Export Capability in
Grassroots Enterprises.
Export

Marketing

Services

on

success fee basis

Capacity building through training
Poverty reduction through export
linkage

23

Research & Analysis

EXIM BANK

Knowledge Building: Research Publications

Research Studies on products, sectors, countries, macro economic issues
relevant to international trade and investment
Sector Studies assessing export potential.
Bilateral Trade and Investment Studies.
International Trade Related Studies.

Exim Newsletters
Export Advantage (bilingual)
Agri Export Advantage (in English, Hindi and 10 regional languages)
Indo-China Newsletter (bilingual)
Indo-Africa, Indo-Latin America and Indo-CIS Magazines (all bilingual)

Contribution to Public Policy formulation through inputs on WTO aspects, impact

of exchange rates on exports, transaction costs, etc.

24

Promotional Activities

EXIM BANK

Exim Bank as Consultant

Setting up an Exim Bank in Malaysia
Establishing an Export Credit Guarantee Company in Zimbabwe
Blueprint for establishing Exim Bank in Zimbabwe
Feasibility study for setting up the Afrexim Bank
Designing of Export Financing Programmes Turkey, South Africa
Export Development Project : Ukraine, Vietnam, Armenia
Mauritius Study on Projecting Mauritius as an Investment Hub for
Indian Firms
Feasibility study for establishment of an export credit and guarantee
facility for Gulf Cooperation Council countries

25

Institutional Linkages
EXIM BANK

Multilateral Agencies

Trade & Invt. Promotion Agencies

Export Credit Agencies

World Bank

JETRO

Exim Bank Romania

ADB

Netherlands Council for

Czech Export Bank

African Development
Bank

Trade Promotion
Polish Agency for

EBRD

Foreign Investment

MIGA

Board of Investment of

IFC
UNCTAD

Sri Lanka
Board of Invt. Mauritius

Hungarian Exim Bank

JBIC
US Exim Bank
PT Bank Ekspor
Indonesia
Exim Bank of China

26

Exims Catalytic Role

EXIM BANK

Exim Bank: Promoting Indias integration into the global economy

Introduced innovative products such as Export Marketing Finance, Financing

Program for Software Exports, FCPC, Forfaiting.

Set up Global Trade Finance Ltd. as a joint venture with IFC and West LB (now
acquired by FIM Bank of Malta) in 2001 for providing export factoring facility to
SMEs.

Set up Global Procurement Consultants Ltd. in 1996 as a joint venture with Indian
private & public sector enterprises to take up overseas assignments in procurement
advisory services.

Instrumental in creation of Asian Exim Banks Forum in 1996 and brought together 8
other Exim Banks operating in Asia to promote intra-regional trade.

Instrumental in creation of Global Network of Exim Banks and Development

Financial Institutions (GNEXID) at Geneva under the auspices of UNCTAD to promote
trade & development finance through cooperation and exchange of information.

27

Exim Bank:

Partner in Globalisation

EXIM BANK

Final Products

Technology

EX
PO
RT

Capital
(Foreign Investment)
Raw Materials

Capital Goods
Capital
(Overseas Ventures)

Capital Goods

I
M
P
O
R

Product
Development
Production
Marketing

VALU
E

N
O
TI
I
D
D
A

Pre shipment
Post shipment

EXIM BANK

THANK YOU
Website

www.eximbankindia.in
www.eximbankagro.in