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Global Trade Finance (GTF), Fimbank’s factoring flagship affiliate in the Indian sub-continent and India’s leading standalone factoring company, has launched a first of its kind web-based “e-loans” sanctioning facility for small scale industry (SSI) exporters.

Under the facility, termed “SSIs – Sanction Your Own Loan “, an SSI unit (which meets the requisite eligibility criteria) can get an export factoring limit sanctioned almost instantaneously by just making an application on the GTF website (www.gtfindia.com).

Factoring is a tailor-made package of services designed to secure debt collection and improve cashflow offering a competitive edge in domestic and foreign markets.

Under the new facility, a registered SSI unit having export relationship with an overseas buyer for at least one year can seek approval of limits from GTF against its sales to various overseas debtors through GTF’s web-based package.

Approval of requested limits is conveyed to the exporter almost instantaneously on submission of basic information pertaining to the SSI unit, details of factorable debtors, key financials, and so on, in the online application form. The application form is user-friendly and at the same time designed to obtain all relevant information on debtors, financials and basic “know your customer “details.

Each SSI could be sanctioned a maximum export factoring limit of approx US$500mn on open account terms under the e-loans facility.

“GTF is focused on supporting exports by the SSI sector. The new service aims to harness the vast potential for growth in SSI sector by alleviating their financing problems through easy, simple and fast availability of finance without compromising on our credit risk evaluation parameters,” said SR Rao, chairman, Global Trade Finance, at the launch event.

There are 12mn SSI units in India, accounting for almost 34% of the total exports in India. SSIs face constraints in terms of insufficient finance at affordable terms, quick turnaround time for their financing and cumbersome documentation. Other critical constraints being product reservation, regulatory hassles, inflexible labour markets and poor infrastructure.

“GTF has taken the initiative to remove the financial constraints faced by SSI’s by launching e-loans. This facility will enable GTF to position itself as a key lending institution supporting the growth of exports by SSIs using an interactive IT platform,” says Arvind Sonmale, managing director and CEO of GTF.

GTF commenced its operations in September 2001, as a joint venture promoted by the Export Import Bank of India, WestLB, Germany and IFC. GTF’s shareholding today is 40% with Export Import Bank of India, 38.5% with Fimbank, Malta, 12.5% with IFC, and 9% with Bank of Maharashtra.

GTF is managed by an independent board having seven directors. It holds the necessary regulatory licences including an authorised dealer status from the Reserve Bank of India for conducting export factoring, import factoring and forfaiting business and related foreign currency operations in India.

Fimbank sees factoring as a specialised service that is complementary to its own trade services and vital to fulfilling the specialised needs of small and medium businesses. Fimbank is committed to introducing factoring services in various countries and has a long-term plan to promote similar joint ventures in other emerging markets. In fact, two projects are currently in advanced stages of implementation, one in Egypt and another entity in Dubai for the MENA region.