SBI and India Exim Bank have made serious strides in dealing with the trade financing gap for firms trading with Africa, as highlighted at a recent event by India Entrepreneurs Forum (IEF) held in Johannesburg, which was opened by Indian Consul General Mahesh Kumar. Kumar said this marks the beginning of regular engagement to assist companies trading in commodities with India.
He remarked that this is the hardest situation that small enterprises find themselves in, trying to access the complexities of international trade. Though large corporations always manage to take care of their financing needs, small-scale enterprises face much higher barriers. Hence, the aim of collaboration between SBI and Exim Bank is to provide business enterprises with that critical support to be able to raise their ability to trade.
Ashutosh Kumar, SBI’s CEO, said the bank has contributed towards the expansion of India’s footprint in Africa. “SBI has invested fresh capital and reinvested earnings in the region for almost three decades now. The offerings include bilateral credit lines to numerous multilateral institutions, including Afri-Exim and the Africa Finance Corporation, for trade loans to key banks across African nations.”
Indirect funding by SBI highly benefits the smaller corporations of these countries, making it possible for them to obtain financial resources that would otherwise be unavailable. The bank now has operations in more than 40 African nations and is able to help Indian businesses meet their bank guarantee requirements.
Shyamashish Acharya is a resident representative of India Exim Bank in Johannesburg and addressed the Trade Assistance Programme that is aimed at bridging the gap in trade financing. It aims to support commercial banks in building their capacities so as to support cross border transactions. TAP zeroes in on markets in which potential trade remains untapped but due to financial constraints in these markets.
Exim Bank is currently present in 31 African countries, the highest of any continent after Asia, Latin America, and Europe. Acharya cited specific projects, such as IT solutions for national identity documents in Ethiopia and electrical network construction in Burundi, as examples of successful initiatives backed by Exim Bank.
SBI COO Kirti Kumar explained that there is no competition between SBI and Exim Bank, but the two operate in tandem. He observed that the latest BRICS move to settle debts in local currencies will not influence the operational framework of the bank because it already trades with several currencies. This agreement between SBI and Exim Bank exemplifies readiness to strengthen India-Africa trade ties through comprehensive financial facilitation.
