Government formulating schemes to provide easy credit for MSME exporters
In a bid to provide easy credit for MSME exporters, Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi has said that the government is formulating schemes which will promote alternate financing instrument through strengthening factoring services and offer assistance to deal with non-tariff measures imposed by other countries.
These schemes are being formulated under the export promotion mission, announced in the Union Budget for 2025-26. In Union Budget for 2025-26, the government has planned an Export Promotion Mission with an outlay of Rs 2250 crore, under which these schemes are being formulated to promote India’s exports. The schemes are expected to be rolled out in about 4-5 months.
The Export factoring services are widely used financing instrument globally. However, due to high factoring costs involving higher rates of interest, higher risk premiums and lack of parity with subvention schemes these services have low adoption in India. Sarangi said the cross-border factoring should attain a certain scale to reach about 3 per cent of merchandise exports (in line with the global average).
