The Australian Export Finance and Insurance Corporation has unveiled details of a new deal with India’s largest bank, The State Bank of India.
Efic plans to collaborate with the State Bank to provide a range of financial solutions, including loans, guarantees, bonds and insurance products, to assist Australian small and medium-size businesses enter the export market in India.
It comes after Australian banks have cut lending to India during the past year, with the Bank of International Settlements reporting a 40 per cent reduction in lending in just the past six months.
Western Australian timber and sheep exporters have recently taken an interest in India, which is the fourth most important export market for small and medium Australian exporters.
The Indian economy is expected to return to high growth in the coming years, after a recent slow-down, and incoming Prime Minister Narendra Modi has designed a reform budget for that purpose.
Efic head of alliance and product Alex Fernandez said the partnership came at an important time for Australian businesses.
“With a recent tightening in domestic lending to India, many Australian SME businesses are struggling to access finance to fund their overseas activities in the country,” he said.
“This new collaboration will provide much-needed support to SME exporters operating in India, allowing them to take advantage of exporting opportunities and grow their business overseas.”
The State Bank of India has over 17,000 branches, and with a 22 per cent domestic market share is the largest bank in that market.
The majority shareholder is the Indian government.
