Export-Import Bank of India:

A Presentation

AHMEDABAD : May 31, 2008

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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)

EXIM BANK

Exim Bank of India

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Leadership and Expertise in India’s Export Finance

Comprehensive Range of Products And Services

– All Stages of the Export Business Cycle –

1982-85

1986-94

ExportExportCreditsCredits

Exim Bank TODAY

Export Capability Creation

Product Centric Approach

Customer Centric Approach

“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”

Evolving VisionEvolving VisionEXIM BANK

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Organisation

Appointedby

Govt. of India * As per Exim Bank Act

BOARD OF DIRECTORS (16)*

HEAD OFFICE

MUMBAI

Domestic Offices

9 MumbaiKolkata, Bangalore AhmedabadGuwahati

Delhi Chennai Hyderabad Pune

OFFICES IN INDIA

OFFICES OVERSEAS

Overseas Rep. Offices

6 Washington D.C.SingaporeJohannesburg

London DubaiDakar

Chairman and Managing Director

5 Directors: Government of India

3 Directors: Scheduled Banks

4 Directors : Professionals/Experts

1 Director nominated by RBI

1 Director nominated by IDBI

1 Director nominated by ECGC

EXIM BANK

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Operational Philosophy

International Trade

FinancingFinancing PromotingPromoting FacilitatingFacilitating

Through

Variety of Financing Variety of Financing ProgrammesProgrammes

Value Added Business Value Added Business Advisory ServicesAdvisory Services

Research & Research & AnalysisAnalysis

Catalyst for Financing

ProjectsProjects ProductsProducts ServicesServices

EXIM BANK

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Range of Products & Services

Pre-Shipment

Export Marketing

Export Production

Export Product

Development

Import Finance

Advisory Services

Investment Abroad

Post-Shipment

At All Stages of Export Business Cycle

INFORMATION

Advisory Services

Knowledge Building

SUPPLEMENTS FINANCING PROGRAMMES

Value Based Services to Exporters

FINANCING, FACILITATING INDIA’S TWO WAY TRADE & INVESTMENTFINANCING, FACILITATING INDIA’S TWO WAY TRADE & INVESTMENT

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Financing Programmes

Financing Programmes (Various Currencies)

Export CreditExport Credit Import CreditImport Credit Loans for Exporting UnitsLoans for Exporting Units

Medium / Long Term

- Lines of Credit

- Buyer’s Credit

- Supplier’s Credit

Short Term

- Pre/Post Shipment Credit

- Import Loan for

capital goods

- Bulk Import Loan for

Raw Materials

- 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

EXIM BANK

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Lines of Credit Programme

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

EXIM BANK

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Project & Services 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.

Promoting Project Exports

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 InvestmentPromoting 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)

Supporting overseas investment

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Overseas Investment FinanceOverseas Investment FinanceEXIM BANK

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

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

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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

Better Resource Utilisation

Balanced Regional Development.

Flexibility to Adapt to Changing Environment

Input Supply to Large Enterprises

Exports

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INDIAN SME SECTOR

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.

INDIAN PERSPECTIVE

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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

 

   

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.

MANUFACTURING SERVICESMICRO Upto Rs.25 lakhs Upto Rs.10 lakhsSMALL ENTERPRISE > Rs.25 lakhs & <=Rs.5 crores >Rs.10 lakhs & <=Rs.2 croresMEDIUM ENTERPRISE > Rs.5 crores & <=Rs.10 crores > Rs.2 crores & <=Rs.5 crores

INDIAN PERSPECTIVE : CONTINUED

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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.

INDIAN SME SECTORINDIAN SME SECTOR

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INDIAN SME SECTOR

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.

SME FINANCING : EXTERNAL ISSUES

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INDIAN SME SECTORINDIAN 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

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.

BUSINESS IMPERATIVES

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Exim Bank and SMEs

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

FINANCING NEEDS OF SME EXPORTERS

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Exim Bank and SMEs

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.

JOINT INITIATIVES

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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

EMS & Skill Upgradation for SMEs

Exim Bank and SMEsEXIM BANK

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Grassroots Business Initiative

Creation of Export Capability in

Grassroots Enterprises.

Export Marketing Services on

success fee basis

Capacity building through training

Poverty reduction through export

linkage

Linking rural industries to global market

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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.

Research & AnalysisEXIM BANK

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Exim Bank as Consultant

Promotional Activities

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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World Bank

ADB

African Development

Bank

EBRD

MIGA

IFC

UNCTAD

Multilateral Agencies Trade & Invt. Promotion Agencies Export Credit Agencies

JETRO

Netherlands Council for

Trade Promotion

Polish Agency for

Foreign Investment

Board of Investment of

Sri Lanka

Board of Invt. Mauritius

Exim Bank Romania

Czech Export Bank

Hungarian Exim Bank

JBIC

US Exim Bank

PT Bank Ekspor

Indonesia

Exim Bank of China

Institutional LinkagesEXIM BANK

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Exim’s Catalytic Role

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.

Exim Bank: Promoting India’s integration into the global economy…

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Exim Bank: Exim Bank: Partner in GlobalisationPartner in Globalisation

Technology

Capital

(Foreign Investment)

Raw Materials

Capital Goods

Final Products

Capital Goods

Capital

(Overseas Ventures)

Product

Development

Production

Marketing

Pre shipment

Post shipmentVALUEVALUE ADDITIO

N

ADDITION

EXPORT

EXPORT

MMII

TTRR

OOPP

EXIM BANK

THANK YOUTHANK YOUTHANK YOUTHANK YOUWebsiteWebsite

www.eximbankindia.inwww.eximbankindia.in

www.eximbankagro.inwww.eximbankagro.in

EXIM BANK