US Banks Turn Greenbacks Flow Towards Indian SMEs
Friday, August 3, 2007
US banks have spotted a huge business opportunity in the small and medium enterprises (SME) here that contribute 9% of the country?s $1-trillion GDP. New Delhi: US banks have spotted a huge business opportunity in the small and medium enterprises (SME) here that contribute 9% of the country?s $1-trillion GDP.
A wave of liberal offers for credit along with US government guarantee is set to make its way to the segment with the US seeking to boost its exports by providing trade finance to SME importers in emerging economies.
The US government has asked its banking sector to be proactive in extending credit to SMEs in emerging economies with this objective, minister counselor for commercial affairs in US embassy in the Capital, Carmine D?Aloisio, told ET.
The move comes at a time when India expects its trade with the US to double to $60 billion by 2009. US, which is India?s largest trading partner, accounted for 16.8% of the country?s exports and 6.3% imports in 2005.
The first bank to come to Indian shores with an SME focus is New York-based M&T Bank. Its line of credit has US Exim Bank guarantee and does not require collateral ? which most Indian banks insist on from SMEs. The other banks learnt to have partnered the US department of commerce?s trade promotion unit in this regard are AmSouth Bank, North Carolina-based Branch Banking & Trust Co, Atlanta-based Sun Trust Banks Inc and Bank of Oklahoma NA.
They are learned to be evaluating their India strategy even as M&T Bank ? that does not have branch presence in India ? last week tied up with city-based law firm Kesar Dass B & Associates and its corporate finance affiliate Tree Pie Advisory Services for reaching out to SMEs. The bank which manages assets worth $57 billion offers credit for importing capital goods, technology and services from US firms.
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