Transcript Document

Export-Import Bank of India:
A Presentation
AHMEDABAD : May 31, 2008
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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 country’s international trade…”
“… shall act on business principles with due regard to public interest”
(Export-Import Bank of India Act, 1981)
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Evolving Vision
EXIM BANK
Product Centric
Approach
Export
Credits
1982-85
Export Capability
Creation
“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 India’s Export Finance
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Organisation
EXIM BANK
BOARD OF DIRECTORS (16)*
 Chairman and Managing Director
 5 Directors: Government of India
OFFICES IN INDIA
HEAD
OFFICE
Domestic
Offices
MUMBAI
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 3 Directors: Scheduled Banks
 4 Directors : Professionals/Experts
Mumbai
Kolkata,
Bangalore
Ahmedabad
Guwahati
Delhi
Chennai
Hyderabad
Pune
 1 Director nominated by RBI
OFFICES OVERSEAS
 1 Director nominated by IDBI
 1 Director nominated by ECGC
Appointed
by
Govt. of India
Overseas
Rep. Offices
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Washington D.C.
Singapore
Johannesburg
* As per Exim Bank Act
London
Dubai
Dakar
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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
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Range of Products & Services
EXIM BANK
At All Stages of Export Business Cycle
Export
Marketing
PreShipment
Export
Production
Advisory
Services
PostShipment
Export
Product
Development
Value Based Services to Exporters
Knowledge
Building
Investment
Abroad
INFORMATION
Import
Finance
Advisory
Services
SUPPLEMENTS FINANCING PROGRAMMES
FINANCING, FACILITATING INDIA’S TWO WAY TRADE & INVESTMENT
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Financing Programmes
EXIM BANK
Financing Programmes (Various Currencies)
Export Credit
Medium / Long Term
- Lines of Credit
- Buyer’s Credit
- Supplier’s 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
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Lines of Credit Programme
EXIM BANK
Lines of Credit (LOCs) (Long term)
Exim’s 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
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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
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Promoting Investment
EXIM BANK
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)
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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
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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
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INDIAN SME SECTOR
INDIAN PERSPECTIVE
SME’s contribute approx. 40% of India’s domestic production, around 35%
of total exports, 80% of Industrial employment, largest manpower employer
overall after agriculture.
SME’s 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 country’s
development. SME Units grow eventually to medium and large enterprises
and SME promotion therefore becomes a major area for policy focus.
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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 SME’s, 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, 3rd party assessment of overall
condition of the SME. Takes into account SME’s 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.
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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)
 Processed Food (70%)
 Chemicals (33%)
 Marine Products (47%)
 Pharmaceuticals (44%)
 Sports Goods (100%)
 Leather (70%)
 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.
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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 SME’s constitute
around 20% of the Bank’s portfolio.
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INDIAN SME SECTOR
Challenges in Credit Delivery
 Access to Information
 Financial Statements
 Constitution of the Business Entity
 Hand Holding
 Security
 Monitoring Issues
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Exim Bank and SMEs
BUSINESS IMPERATIVES
 Higher Interest Spread for SME’s
 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.
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Exim Bank and SMEs
FINANCING NEEDS OF SME EXPORTERS











Pre-shipment/Post-shipment Finance/working capital
Forfaiting
Buyer’s Credit
Supplier’s 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
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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 SME’s. The model seeks to evaluate SME’s
based on future potential as against past financials thus facilitating credit flow to
deserving SME’s.

MOC signed with Small Industries Development Bank of India (SIDBI) for
cooperation in SME sector funding.
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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.
 Exim’s 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 Exim’s 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
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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
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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.
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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
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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
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Exim’s Catalytic Role
EXIM BANK
Exim Bank: Promoting India’s 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.
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Exim Bank:
Partner in Globalisation
EXIM BANK

Technology

Final Products

Capital

Capital Goods
(Foreign Investment)

Raw Materials

Capital Goods

Capital
(Overseas Ventures)
 Product
Development

Production

Marketing

Pre shipment

Post shipment
EXIM BANK
THANK YOU
Website
www.eximbankindia.in
www.eximbankagro.in