Exim bank launched its subsidiary exim finserv at gift city: India Exim Finserv IFSC Pvt Ltd, a subsidiary of the Export-Import Bank of India, was inaugurated at Gujarat International Financial Tech City by Dr. Secretary, Financial Services, Ministry of Finance, Vivek Joshi. Exim Finserv is primarily focused on providing trade finance products to Indian exporters, with a particular emphasis on export factoring.
Exim bank launched its subsidiary exim finserv at gift city
- Receivables Financing: Export factoring helps exporters improve their cash flow by providing immediate funds against their accounts receivable. Instead of waiting for customers to pay invoices, exporters can receive a significant portion of the invoice amount upfront, which can be crucial for maintaining liquidity and funding their business operations.
- Non-Payment Risk Coverage: Export factoring companies often provide protection against the risk of non-payment by customers. In the event that the buyer defaults on the payment, the factoring company may absorb the loss, reducing the exporter’s exposure to payment risk.
- Accounts Receivable Management: Export factoring includes services related to accounts receivable management, which can help exporters streamline their operations. This includes credit checking, collection of payments, and other administrative tasks associated with managing trade credit.
By offering these services, Exim Finserv aims to support Indian exporters by improving their cash flow and reducing the risk associated with international trade. This, in turn, can enable exporters to confidently explore new markets and seize growth opportunities. Export factoring is a valuable tool for businesses engaged in international trade, as it provides financial stability and risk mitigation in the often complex world of global commerce.
Export factoring is a financial service
Factoring services, as mentioned, can indeed be particularly beneficial for Micro, Small, and Medium Enterprises (MSME) exporters. These businesses often face challenges in obtaining traditional financing due to limited collateral and credit history. Factoring services primarily evaluate the quality of the accounts receivable, making it a more accessible and viable financing option for many MSMEs engaged in international trade.
Dr. Vivek Joshi, Secretary of the Department of Financial Services (DFS), recognized the importance of Exim Finserv in the context of improving access to finance for MSMEs in India. He highlighted that the launch of Exim Finserv is timely, especially given the needs of the MSME sector. This is in line with the Government of India’s efforts to support and promote the growth of MSMEs, which are a vital part of the Indian economy.
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factoring their accounts receivable
The factoring services provided by Exim Finserv are expected to offer a consistent and straightforward framework to meet the financial requirements of MSME exporters. By factoring their accounts receivable, MSMEs can access the working capital they need to grow their businesses, improve cash flow, and mitigate payment risks, thereby enhancing their ability to participate in international trade and expand their operations.
The availability of such services tailored to the unique needs of MSMEs is a positive development for this sector and can contribute to their sustained growth and success in the competitive global market.