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Exim Bank continues romance with software industry

These include

• a Rs 120 million grant fund for pormoting software exports;
• increase in grant support to Rs 1.5 million per winning bid for a multilateral agency funded project overseas;
• new programme for financing software product development;
• enhanced funding for overseas assignments awarded to Indian consultants and
• a comprehensive package for financing Indian overseas joint ventures.

T O D A Y

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The Exim Bank would provide loans at concessional rates, below the bank's minimum lending rate, and has earmarked a fund of Rs 20 million for meeting the interest differential between the MLR and the concessional interest rate.

Product development finance will cover import of software tools, encryption technologies, hardware for product development, specialised skills upgradation and beta testing expenditure.

The bank will also provide finance, covering 50 per cent of expenditure for implementing strategic export marketing plans that aim at enhancing presence in target markets.

The bank would reimburse up to 50 per cent of the expenditure incurred by software exporters in obtaining international quality certification such as the ISO 9000. Rs 100 million has been earmarked for supporting export marketing and quality certification for software exporters.

The Exim Bank has decided to adopt exporting companies to provide financing and advisory services under one umbrella. It has shortlisted 25 companies from the software sector to meet their entire financing requirements.

The bank is also ready to take up equity participation in Indian companies in their overseas ventures for which the bank is still awaiting the Union government's approval.

It is also entering a co-operation agreement with the Nairobi based Preferential Trade Area Bank to enable use of Indian consultants for the projects financed by the bank in Africa. The Exim Bank will fund the professional fees payable to Indian consultants selected by the bank at the maximum rate of Rs 8,000 per day up to 180 days.

Under the programme called strategic market entry support, the bank decided to reimburse cost of bidding up to Rs 1 million per winning bid for projects funded by multilateral agencies which constitute a $50 billion market and carry negligible payment risk.

The ceiling for reimbursement of Rs 1 million per bid has now been increased to Rs 1.5 million per winning bid in new markets.

Over the last 10 years, Indian companies have submitted over 1,600 bids valued at over Rs 300 billion for such projects with a success rate of 16 per cent in value terms.

To promote greater use of Indian consultant in overseas projects, the bank has entered into an arrangement with the International Finance Corporation of Washington so that Indian consultants can be recruited for short-term assignments in Africa, Central America, South Pacific, Poland and other regions.

So far, over 40 assignments have been undertaken by Indian experts under the programme in Africa, Vietnam, Poland and Mauritius, covering diverse areas such as oil and soaps, leather shoes, textile, financing accounting and software development.

UNI

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