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Unit 5: Methods of Financing Exporters and Business Risk Management

The exporter can obtain valuable information on the standing of the foreign buyers on Notes
trade customs and market potential in order to expand his business.

The following up of receivables by import factor will speed up the collections.
As we provide finance up to 90% on export invoices, the exporter has an improved cash
flow and his liquidity improves markedly.
Source: www.sbifactors.com

5.3 Role of Export-Import Bank of India in Export Finance

Export-Import Bank of India, set up in 1982, for the purpose of financing, facilitating, and
promoting foreign trade in India, is the principal financial institution in the country for
coordinating the working of institutions which are engaged in financing exports and imports.
The bank provides competitive finance at various stages of the export cycle. The gamut of
services provided by the bank is depicted in the figure 5.1 below:
Figure 5.1: Gamut of Services

EXIM INDIA operates a wide range of financing and promotional programmes. The Bank finances
exports of Indian machinery, manufactured goods, consultancy and technology services on
deferred payment terms. EXIM INDIA also seeks to co-finance projects with global and regional
development agencies to assist Indian exporters in their efforts to participate in such overseas
projects.
The Bank is involved in promotion of two-way technology transfer through the outward flow of
investment in Indian joint ventures overseas and foreign direct investment flow into India.
EXIM INDIA is also a Partner Institution with European Union and operates for facilitating
promotion of joint ventures in India through technical and financial collaboration with medium-
sized firms of the European Union.

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