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U.S. banks attracted to SME biz
By siliconindia
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Tuesday, 24 July 2007, 19:30 IST
New Delhi: A huge business opportunity in the small and medium enterprises which contributes nine percent to India's $1 trillion GDP were tracked by the U.S banks, reported Economic Times.
By providing trade finance on credits with U.S. government guarantee to SME exporters in emerging economies, it seeks to improve Indian exports. The U.S government has asked its banking sector to be proactive in extending credit to SMEs in emerging economies with this objective, minister counselor for commercial affair in the U.S embassy in the capital Caramine D Aloisio told ET.
The move came at a time when India expected its trade with the U.S. to double to $60 billion by 2009. The first bank that joined hands with an SME focus is New York based M&T Bank. It has U.S Exim bank guarantee and does not need any collateral which most of the Indian banks insist on from SMEs. In this regard, other banks like AmSouth Bank, North Carolina-based Branch and Trust Company, Atlanta -based Sun Trust Banks and Bank of Oklahoma have partnered with the U.S. department of commerce's trade promotion unit.
Hence M&T bank, which does not have a branch in India, last week has tied up with city based law firm Kesar Dass B and Associates and its corporate finance affiliate Tree Pie Advisory Services for reaching out to SMEs.
The bank which manages assets worth $57 billion offers credit for importing capital goods, technology and services from U.S. firms.