The State Bank of India (SBI) and India Exim Bank are taking significant steps to support businesses in Africa by bridging the trade finance gap. This initiative was highlighted at the India Entrepreneurs Forum (IEF) event in South Africa, where the banks outlined their trade finance solutions aimed at easing financial access for African companies engaged in trade with India.
Strengthening India-Africa Trade Ties
The event, organized by Consul General of India Mahesh Kumar, marks the beginning of ongoing engagements between the Indian government and the IEF. Kumar emphasized the importance of this support, particularly for smaller businesses that struggle with trade financing complexities. “For smaller businesses, trade finance often appears complex and challenging. Our goal is to assist these companies by addressing capacity-building needs,” he stated.
SBI’s Role in Enhancing Trade Finance Across Africa
Speaking at the forum, SBI’s CEO Ashutosh Kumar detailed SBI’s role in supporting African trade by financing local banks and syndication funding, which directly benefits smaller African businesses. Over the past 27 years, SBI has committed to growth in Africa, retaining capital and establishing bilateral credit lines with organizations like Afri-Exim and Africa Finance Corporation. This funding support indirectly reaches smaller companies that would otherwise find it challenging to secure credit.
Kumar stated, “SBI is empowering India’s footprint in Africa, providing crucial trade financing to South African banks and supporting trade loans in various African nations. Our bank guarantees cover over 40 African countries, aiding Indian corporates’ trade activities across the continent.”
India Exim Bank’s Trade Assistance Programme (TAP): Supporting Cross-Border Trade
Shyamashish Acharya, Resident Representative at India Exim Bank’s Johannesburg office, introduced the Trade Assistance Programme (TAP), a trade facilitation initiative aimed at narrowing the trade finance gap. TAP provides credit enhancement for trade transactions, helping commercial banks expand into underserved markets with untapped potential. With TAP, India Exim Bank extends its presence to 31 African nations, supporting projects that integrate India’s economic engagement post-COVID.
Among the projects funded, Acharya noted India Exim Bank’s role in enabling CSM Technologies to deploy IT solutions for national ID systems in Ethiopia and supporting East India Udyog’s construction of electrical networks in Burundi. The bank is exploring further credit lines with South African banks for projects in Zambia and Zimbabwe, reinforcing its commitment to African infrastructure development.
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Collaborative Efforts Between SBI and India Exim Bank
SBI’s COO Kirti Kumar clarified that SBI and India Exim Bank complement each other’s efforts in the region, rather than compete. He added that new BRICS initiatives for settling trade in local currencies would not disrupt SBI’s operations. “Trading in multiple currencies is already part of our operations, so adding a local currency is simply an extension of our services,” he said.
Conclusion: Expanding Trade Finance Support in Africa
The India Entrepreneurs Forum event underscored SBI and India Exim Bank’s mission to enhance India-Africa trade relations. By supporting financial access for SMEs, both banks are paving the way for stronger cross-border partnerships and more robust economic growth across Africa.
