Financial Institutional Support

to Exporters

● SIDBI
● EXIM Bank
● ECGC
 SIDBI
● SIDBI is the Primary Financial Institution for
promoting, developing and financing MSME
(Micro, Small and Medium Enterprise) sector.
● SIDBI helps MSMEs in acquiring the funds they
require to grow, market, develop and
commercialize their technologies and innovative
products.
 Functions of SIDBI

● Small Industries Development Bank of India refinances loans

● It discounts and rediscounts bills.
● It also helps in expanding marketing channels for the products of SSI sector both
in the domestic as well as international markets.
● It offers services like factoring, leasing etc.
● It promotes employment-oriented
● It also initiates steps for modernisation and technological up-gradation
● It also enables the timely flow of credit for working capital as well as term loans
● It also co-promotes state-level venture funds.
 SIDBI Assistance To Export Oriented MSMEs Under
Ubharte Sitaare Programm

● To support the MSME units, which are unable to scale up their export
operations due to lack of finance, having export potentials.
● To identify and encourage the firms to have differentiated products,
processes, or technology and to enhance the export business.
● To help the existing exporters to widen up their products and also target new
export market.
● To identify and ease various challenges, which hinder the exports, which are
faced by successful enterprises.
 Export-Import Bank of India (EXIM Bank)
● The Export and Import Bank of India, popularly known as the EXIM
Bank was set up in 1982.
● It is the principal financial institution in India for foreign and
international trade.
● The main function of the Export and Import Bank of India is to provide
financial and other assistance to importers and exporters of the
country.
 Main Functions of EXIM
● Finances import and export of goods and services from India
● It also finances the import and export of goods and services from countries
other than India.
● It finances the import or export of machines and machinery on lease or hires
purchase basis as well.
● Provides refinancing services to banks and other financial institutes for their
financing of foreign trade
● EXIM bank will also provide financial assistance to businesses joining a joint
venture in a foreign country.
● The bank also provides technical and other assistance to importers and
exporters. Depending n the country of origin there are a lot of processes and
procedures involved in the import-export of goods. The EXIM bank will
provide guidance and assistance in administrative matters as well.
● Undertakes functions of a merchant bank for the importer or exporter in
transactions of foreign trade.
● Will also underwrite shares/debentures/stocks/bonds of companies engaged
in foreign trade.
● Will offer short-term loans or lines of credit to foreign banks and governments.
● EXIM bank can also provide business advisory services and expert
knowledge to Indian exporters in respect of multi-funded projects in foreign
countries
Export Credit Guarantee Corporation of India (ECGC)
● In order to provide financial assistance to the exporters through commercial
banks and other financial institutions, ECGC guarantees various loans
provided by these financial intermediaries to the exporters.
● Due to the guarantees given by the ECGC, commercial banks can liberally
lend money to the exporters.
● In the event of any losses in the exports of goods, the exporters are protected
by the ECGC policy.
● ECGC in export – provides specific guarantees to the various finance
institutes and the banks associated with the exporters.
 ECGC Policy and its Assistance to Exporters
● Packing Credit Guarantee:The bank will be entitled to claim 66 2/3 % of its
loss
● Post shipment Export Credit Guarantee:The post shipment credit guarantee
provides protection to banks against non-realisation of export proceeds and
the resultant failure of the exporter to repay the advances availed. The
percentage of loss covered under this guarantee is 75%.
● Export Production Finance Guarantee: Export Production Finance Guarantee
enables banks to sanction advances at pre-shipment stage to the full extent of
the domestic cost of production.
● Export Performance Guarantee:
● Export Finance (Overseas Lending) Guarantee:
● Insurance protection to exporters in case of non-payments provided by the export
credit policy
● A credit insurance policy eases you the worrying burden of revenue payments from
your products. You can utilise that time in strategizing expansion plans for your
business.
● The ECGC policy advises and guides exporters on different aspects of their business,
e.g. it helps you to make your credit timelines more flexible. This will increase your
goodwill, and your exports can witness more growth as buyers welcome extended
credit timelines.
● Exporters can recover non-payments towards their exports with the help of this policy
● It uses its credit ratings to provide important information on different countries with
regard to exports and export-related activities.
● It furnishes accurate information about the financial stability of global buyers to the
exporters.
● It facilitates the process of acquiring export finance from financial institutions and
banks for exporters