SBI and India Exim Bank bridge trade financing gap in Africa

Johannesburg: The State Bank of India (SBI) and India Exim Bank are working to address trade finance challenges faced by African businesses, as shared by the heads of the banks' South African branches. Speaking at an India Entrepreneurs Forum (IEF) event hosted by Consul General Mahesh Kumar, the banks highlighted their initiatives aimed at bolstering India-Africa trade ties, particularly for small and mid-sized businesses. Consul General Kumar noted the forum's importance, emphasizing that while larger businesses can generally manage trade financing, smaller firms often find the process daunting.

SBI funds African banks through syndications

SBI's CEO, Ashutosh Kumar, discussed the bank’s critical role in African trade, explaining that SBI funds African banks through syndications, which allows smaller businesses to access financing indirectly. He highlighted SBI’s ongoing investments in Africa and its bilateral credit partnerships with organizations like Afri-Exim and the Africa Finance Corporation. SBI currently supports over 40 African nations, assisting Indian corporates with bank guarantees and project bid bonds across the continent.

ALSO READ: Bootcamp for Open Challenge Program 5.0 of OctaNE – 23-24 October 2024

Shyamashish Acharya, India Exim Bank’s Resident Representative, further detailed their Trade Assistance Programme (TAP), which enhances trade by strengthening commercial banks' capacity for cross-border transactions. This program focuses on opening untapped markets by improving trade financing access in traditionally underserved regions. India Exim Bank is currently active in 31 African countries, with projects like a national identity document rollout in Ethiopia and electrical network construction in Burundi already in progress.

Two banks complement each other rather than compete

SBI COO Kirti Kumar clarified that the two banks work in a complementary manner, jointly strengthening India’s trade footprint in Africa. Addressing recent BRICS initiatives for settling debts in local currencies, he noted that these changes would have minimal impact on operations, as SBI already manages trades in multiple currencies.

These efforts underscore India’s growing economic partnership with Africa, with SBI and India Exim Bank emerging as essential facilitators of cross-continental trade and development.