Union Minister for Commerce and Industry Piyush Goyal has advised Indian banks to provide improved and more inexpensive lending to MSMEs to meet the aim of US$1 trillion in merchandise exports. This was revealed during a meeting organised to address boosting the availability of export finance to MSME exporters.
The Department of Commerce organised the meeting in New Delhi with Export Credit Guarantee Corporation Limited (ECGC). The top executives of 21 banks attended it. Export Financing and Export Credit Insurance for Banks (ECIB) have now proposed additional changes to make adequate and cheap financing available to a greater segment of MSME exporters.
The product enables borrower accounts to be considered similarly to ‘AA’ rated accounts, resulting in lower export credit costs for exporters. Piyush Goyal stated that the ECGC could investigate expanding the scheme suggested for nine banks to all banks to improve the export credit offtake for MSME exporters.
Bankers requested that ECGC use a claim processing system like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), for which the Commerce and Industry Minister advised ECGC to follow a pattern along similar lines to compensate their loss.
The Minister encouraged banks to take advantage of the proposed plan and provide substantial and reasonable export financing to MSME exporters. This will enable the government to meet its aim of US$ 1 trillion in merchandise exports by 2030.
The Minister also advised ECGC to investigate 75% claim payment to banks under the ECIB scheme, within 45 days of receiving the claim. The Minister also stated that all ECGC services would be digitised within the next four months to reduce physical interaction.
