Small and medium enterprises from Assam on the lookout for funds to import machinery can now get it from the Export-Import (Exim) Bank of India, which has just got a $100 million loan from the Asian Development Bank (ADB).
The loan is for eight poorer states of the country, including Assam, for providing export finance to smaller firms with an aim to boost employment through increased trade.
“We are trying to popularise this facility so that needy entrepreneurs from Assam can gain access to funds,” Exim Bank Guwahati regional head Shonly Litting said. He said small and medium enterprises contribute a lot to Indian exports, and enterprises from Assam should take full advantage of the loan facility.
The Exim Bank, which has been operational in the region since 2005, has so far sanctioned Rs 40 crore to various enterprises for export purposes. The firms that have received assistance belong to various sectors ranging from agriculture to handloom.
There are around 20 lakh registered small and medium enterprises (SMEs) in Assam and the sector plays a crucial role in generating employment and creating new entrepreneurs in the state.
To facilitate growth of micro enterprises, the Assam government has proposed to strengthen the block-level infrastructure in Assam and adopt a special policy for providing rehabilitation packages to small, cottage and khadi industries.
Moreover, the North Eastern Development Finance Corporation (NEDFi) has been promoting the SME sector by offering innovative loan products, helping entrepreneurs to prepare detailed project reports and facilitating market linkages by organising fairs and aiding in participation in national and international trade fairs.
“There is no pre-determined allocation for each of the eight states that have been selected to benefit from this initiative. India Exim will have the sole responsibility to select the firms that will receive funding from the ADB loan. India Exim will use its branch network to solicit proposals for funding from small and medium enterprises and will carry out a rigorous verification of each company to determine the soundness and bankability of the firm, its operations and the specific business proposal that requires funding,” ADB principal financial sector specialist Peter Marro told The Telegraph.
According to the Asian Development Bank, small and medium enterprises in poorer, often rural, parts of India have more trouble than larger firms and those located in more prosperous parts of the country in getting long-term export finance for company-specific or shared small and medium enterprise cluster facilities, and for import of machinery and technology. Failure to access export finance holds back trade, economic development and the income growth that go along with it, the bank reasons.