The Hindu Business Line : Exim Bank to raise $250 m for funding SMEs

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Chennai Jan. 26 Exim Bank of India is negotiating with "a multilateral lending agency" for a $250-million loan to fund small and medium enterprises (SMEs).

The process of due diligence is on and the agreement is likely to be firmed up in two months, the bank's Chairman and Managing Director, Mr T.C. Venkat Subramanian, told Business Line.

The 10-year loan will be at a "good price", also because there would be no incidence of `withholding tax' (levied on interest payments on foreign loans) — the lender being a multilateral funding institution.

He said that Exim Bank had also firmed up agreements to raise $1 billion (Rs 4,500 crore) through `medium term notes'.

The bank could tap any amount up to $1 billion as and when required. The first tranche would be drawn shortly and the entire amount would be consumed within 10 months, Mr Venkat Subramanian said.

With Indian companies increasing their overseas presence, either through acquisitions or exports, there is a growing demand for Exim Bank's services.

The bank, which is in its Silver Jubilee year, has several schemes to provide equity or debt funds to Indian companies' overseas ventures.

In the current year, the bank's outstanding advances would increase 25 per cent to Rs 22,000 crore, he said.

In November, the bank raised $100 million from the Exim Bank of Japan. This would be utilised for funding the Indian companies' Japanese ventures or production meant for export to Japan.

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