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Monday, Sep 04, 2006

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Exim Bank to evaluate SMEs on non-financial basis

Elina Mohanty

Model to be implemented this fiscal

Mumbai , Sept. 3

The Export Import Bank of India with the International Trade Centre, Geneva plans to develop a model for evaluating small and medium enterprises on a non-financial basis. "Most of the banks judge SMEs on financials. This model will take into account the non-financial parameters of a company," said Mr Shankarnarayan R. Rao, Executive Director, Export-Import Bank of India.

Non-financial factors include experience of promoters and the export potential of the product being developed including its uniqueness. "This model would be the first of its kind in India and will be implemented this fiscal," said Mr Rao.

Exim Bank's total SME portfolio is worth Rs 2,700 crore and forms roughly 20 per cent of the bank's total loan book, the official said. The bank has Lines of Credit worth $2 billion.

Manufacturing and agro-processing sectors are expected to show good export performance this year. Exim Bank not only finances exports but also helps a company market its products.

Brand building

"Brand building is recognised by the bank as an asset," said Ms Smita Pethe, CEO, Verjinia Foods, an Exim Bank borrower.

Verjinia Foods based in Mumbai exports ready-to-cook and ready-to-eat food to South Africa. Export earnings of the enterprise contributes 50 per cent to its total income. "The bank has helped the enterprise in promoting its products and giving it publicity unlike commercial banks," she said.

Exim Bank frequently holds seminars for SMEs on marketing techniques. "Marketing is extremely important for an export oriented company, especially for SMEs investing abroad through joint ventures and partnerships," Mr Rao said.

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