Exim Bank, IFC, West LB join hands
21 Sept 2001
Mumbai: The Export
Import Bank of India (Exim Bank), International Finance
Corporation (IFC) and West LB have joined hands and have appointed
Global Trade Finance (GTF) for taking up the activity of export
Factoring is a mechanism
for financing receivables of an exporter without recourse to the
exporter. For example, if a company A has exported goods worth,
say, Rs 10 crore to a company B in the US (the export has a credit
period of three month), A can then approach GTF immediately after
the export and receive the sales proceeds amount from GTF.
GTF will charge a fee for
the factoring and from then onwards, the onus and responsibility
of collecting the amount from B will lie with GTF, leaving A free
to carry on with its further activities.
Speaking to press
reporters in Mumbai on 20 September, GTF managing director Meena
Mankar said: "In the first year itself we expect a turnover
of around $200 million and a breakeven level of profits."
A few areas GTF plans to
tap are textiles, stones and pharma. Mankar said that GTF would
soon be looking at the software industry. "GTF’s main
objective will be to promote market-driven export-financing
solutions for small- and medium-sized exporters. GTF also plans to
provide export-import solutions on an e-commerce platform for
Indian exporters along with comprehensive receivables management
service through factoring."
GTF has also signed an
MoU with the France-based Coface Group, which will provide credit
protection on an e-commerce platform under which GTF will provide
factoring services to exporters.
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