IMPLEMENTATION COMPLETION REPORT INDIA EXPORT …

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 16048

IMPLEMENTATION COMPLETION REPORT

INDIA

EXPORT DEVELOPMENT PROJECT(LOANS 3058-IN and 3059-IN)

September 25, 1996

Country Operations, Industry & Finance DivisionCountry Department IISouth Asia Region

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS(annual average)

Currency unit = Indian rupees (Rs.)

1989-90 $1.00 = Rs. 16.66 Official Rate1990-91 $1.00 = Rs. 17.95 Official Rate1991-92 $1.00 = Rs. 24.52 Official Rate1992-93 $1.00 = Rs. 26.41 Official Rate1993-94 $1.00 = Rs. 31.36 Unified Rate1994-95 $1.00 = Rs. 31.40 Unified Rate1995-96 $1.00 = Rs. 33.46 Unified Rate1996 (as of March 31, 1996) $1.00 = Rs. 34.45 Unified Rate

Note: A dual exchange rate system was created in March 1992, with a free market for about 60 percent of foreignexchange transactions at a rate of $1.00 = Rs. 30.65. The exchange rate was reunified at the beginning of March1993 at the free market rate.

FISCAL YEAR

April 1 to March 31

ABBREVIATIONS AND ACRONYMS

BOB: Bank of BarodaDFI: Development Financial InstitutionsEDF: Export Development FundEDP: Export Development ProjectEMF: Export Marketing FundERAS: Exchange Risk Administration SchemeERR: Economic Rate of ReturnEXIM: The Export Import Bank of IndiaFRR: Financial Rate of ReturnGOI: Government of IndiaICICI: Industrial Credit and Investment Corporation of India Ltd.ICR: Implementation Completion ReportIDBI: Industrial Development Bank of IndiaIEP: Industrial Export Project - Engineering ProductsPCB: Participating Commercial BankPF: Productivity FundTAF: Technical Assistance Fund

FOR OFFICIAL USE ONLY


INDIA


TABLE OF CONTENTS

Preface ............................ i

Evaluation Summary .......................... ii

Project Implementation Assessment ............................ 1

A. Background .B. Project Objectives .2C. Achievement of Project Objectives .5D. Implementation Record and Major Factors Affecting the Project . 7E. Project Sustainability .9F. Bank Performance . 1G. Borrower Performance . 1H. Assessment of Outcome .1 1I. Future Operations .12J. Key Lessons .12

Annex 1: Statistical Tables

Annex 2: Mission's Aide-Memoire

Annex 3: List of Sub-Loans

Annex 4: Borrower Contribution to the ICR

Tis document has a restricted distribution and may be used by recipients only in the performance of their|oficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.


INDIA


PREFACE

1. This is the Implementation Completion Report (ICR) for the Export Development Projectin India, for which Loans 3058-IN and 3059-IN in the amount of US$295 million equivalentwere approved on May 12, 1989, and made effective on September 21, 1989.

2. The loan was closed on March 31, 1996, the original closing date. Final disbursementtook place on July 31, 1996, and a balance of US$9,048,946.84 was canceled. Cofinancing forthe project was provided by the Japanese Grant Facility.

3. The ICR was prepared by Paulo de Sa (IENIM) under the supervision of Mona Haddad(Task Manager, SA2CI) and reviewed by Luis Emesto Derbez (Division Chief, SA2CI) andKazuko Uchimura (Project Advisor, SA2DR). The borrower provided comments that areincluded as an annex.

4. The preparation of this ICR began during the Bank's completion mission, comprisingPaulo de Sa (IENIM), Herman Nissenbaum (Consultant), and Lin Chin (SA2CI), who visitedIndia from March 31-April 12, 1996. Paul Beckerman (SA2CI) joined the mission in Bombay.The ICR is based on material obtained during the mission and contained in the project file. Theborrower contributed to the preparation of the ICR by contributing views that are reflected in themission's aide-memoire and by preparing an evaluation of the project's execution and initialpreparation.

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INDIA


EVALUATION SUMMARY

1. Prior to the Export Development Project, initiated in 1989, the World Bank had made 19development finance loans totaling US$1.4 billion. These funds were channeled to privateIndian firms engaged in all sectors of industrial activity through domestic financialintermediaries, mainly the Industrial Credit and Investment Corporation of India (ICICI) and theIndustrial Development Bank of India (IDBI). The Export Development Project is the directfollow-up to an earlier Bank loan of US$250 million for the Industrial Export (EngineeringProducts) Project (Loan 2629/30-IN). That project had shown the need to strengthen thecapabilities of firms and financial institutions in designing, implementing, and appraising exportdevelopment programs and export-oriented investments. These lessons were incorporated in theExport Development Project.

2. Project operations spanned two important changes, one in the domestic policyenvironment and the other in the World Bank norms covering lending operations. First, in July1991 India faced serious fiscal and external imbalances that placed it on the verge of defaultingon its external debt obligations. The authorities responded by implementing a substantialstabilization and adjustment program aimed at liberalizing the economy through unprecedentedreforms in the investment regime and in trade, financial, and fiscal policies. As a result theenvironment for private sector development and export growth improved substantially. Second,since 1991 the Bank has moved away from strengthening specific sectors, increasing domesticresource mobilization, and improving selected groups' access to credit, toward a broader policyeffort aimed at improving a country's economic and financial environment as a whole. It isagainst this background that the Export Development Project is reviewed.

Project Objectives

3. The project was designed to help the Government of India carry out its strategy ofincreasing the competitiveness and exports of manufactured products, thus providing the basisfor continued active dialogue between the Government and the Bank on trade policy and relatedreforms. In addition, the project was intended to build institutional capacity within the Indianfinancial system by helping financial institutions improve their abilities to assess export projects,mobilize the resources needed to finance such projects, and provide direction and advice to theirclients on export issues and markets.

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4. To achieve its objectives, the project assisted four financial institutions through an exportdevelopment fund of US$20 million, to finance part of the marketing and technical services andforeign travel expenses associated with the preparation and implementation of client firms'export development programs; a technical assistance fund of US$2.7 million equivalent, to helpthe financial institutions strengthen their capacity to appraise export projects and advise firms onexport strategy issues; and a term lending component to finance export investment projects. Thiscomponent came under two different loans: a US$175 million loan for the ICICI and a US$100million loan for three other financial intermediaries (the Export-Import Bank of India, Bank ofBaroda, and Canara Bank, referred to collectively as "participating commercial banks").

Project Implementation

5. The loan was approved May 12, 1989, and became effective September 21, 1989. Theoriginal closing date was March 31, 1996, and no extensions were required. Total project cost isestimated at US$858 million, of which US$189 million were drawn from IBRD funds. TheICICI term lending component provided US$76 million for subloans to 102 companies; theparticipating commercial banks' component provided US$96 million for subloans to 240companies. More than 28,000 jobs were created as a result of this credit line. In addition, theexport development fund supported marketing programs for about 450 companies, with anaverage grant of US$36,725. By the end of fiscal 1996 the ratio of actual incremental exportearnings to grants had already largely exceeded the target of 10:1 (102 times in the case ofExport-Import Bank). About US$2.6 million was spent on the technical assistance fund.

6. Project implementation proceeded without major problems because the experienceacquired by the financial institutions during the Industrial Export Project enabled them toimplement the project without making major adjustments to their operations. Additionally, sincethe project did not target specific industrial sectors, each bank was able to fully direct theavailable funds to its existing client base or to market aggressively the credit line in order toexpand it. Issues affecting implementation related to the design of the technical assistance fundand the exchange risk administration scheme. The technical assistance fund was less successfulthan the export development fund because its design was inadequate and there was little follow-up to the initial training sessions. After three years with no disbursements, the scope of thetechnical assistance fund was widened, and most of it was eventually disbursed.

7. The implementation of the two credit lines followed different patterns as a consequenceof the separate on-lending terms and conditions. The Government agreed to bear interest rateand foreign exchange risks for the commercial banks but not for the ICICI. The Government wasparticularly intent on meeting the growing demand for term credit by the small and medium-sizeclients of the commercial banks because of these clients' potential for stimulating industrialexpansion. The Government did, however, require that the terms of this on-lending be revisedperiodically in order to avoid subsidies. During project implementation interest rates weremostly positive in real terms and were consistent with other lending sources (except in 1991,when the Reserve Bank raised the commercial banks' minimum lending rate to 18.5 percent).Accordingly, the commercial bank component disbursed smoothly, especially when other importfinancing became scarce during the 1991 foreign exchange crunch.

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8. In the case of the ICICI the authorities' views were determined more by long-termfinancial sector aims. They believed that it was important to terminate coverage of foreignexchange risk for long-term rupee lending, a view with which the Bank concurred. To this endthe Indians proposed a single currency loan system, which was rejected because such systemswere not being offered by the Bank at the time. Bank staff believed that the optimum solutionwas to have a system without foreign exchange controls and with market-determined interestrates. They understood, however, that India was not yet ready for such a system and, inparticular, lacked a forward foreign exchange market to help borrowers protect themselves. TheGovernment and the Bank eventually agreed that using the exchange risk administration schemecurrency pool arrangement to manage foreign exchange risk was an acceptable second-bestsolution. The scheme was intended to increase demand for foreign exchange-denominated termlending by providing a measure of protection to borrowers against interest and exchange raterisks and by distributing the cost of such protection equitably among borrowers. The scheme,considered superior to the revised Industrial Export Project's on-lending formula, was introducedby the Government in April 1989 for the foreign commercial borrowings of major developmentfinancial institutions.

9. Unfortunately, the designers of the scheme could not anticipate the 47 percent rupeedepreciation in 1989-91, which caused annual interest rates under the scheme to rise to 26percent and rendered effective repayment rates unaffordable. As a result the ICICI's line ofcredit stalled. The introduction of partial convertibility of the rupee gave exporters no incentiveto pay above-market rates on fixed loans, and the borrowing companies' lack of familiarity withthe Bank's currency pool made them reluctant to take on exchange rate risk at a time of rapidrupee devaluation. In 1992 the Government and the Bank discussed alternative interest rateformulas that might overcome the shortcomings of the exchange risk administration scheme butfailed to reach agreement. Because the ICICI could not assume the foreign exchange risks andthe Bank could not retroactively alter currency pool arrangements under existing loans, thescheme was discontinued in February 1993, leading to the cancellation of US$98.7 million.

Project Results

10. The project's objectives were well conceived and have been successfully achieved despitechanges in the macroeconomic environment that were difficult to predict at the time ofpreparation and appraisal. Prospects for project sustainability are very favorable. The termlending component led to substantial investment in India's export industries and contributed tocompanies' modernization efforts, improving their ability to compete with foreign firms andattenuating resistance to the liberalization of trade policy. In addition, it helped several small andmedium-size companies expand aggressively through export-led growth. The loan wasparticularly useful for new entrepreneurs and new exporters because few other sources of fundswere available to them. The export development fund helped Indian companies sharpen theirexport awareness and penetrate world markets, shifting them away from volume-orientedactivities to an approach focused on quality and service to clients.

11. The performance of the four financial institutions involved in the project and the changesobserved in their internal procedures and organization--making them more commercially

oriented and more responsive to client requirements--are considered satisfactory. The projectimproved financial institutions' abilities to assist clients in export marketing and quality-enhancing activities, to widen their client base, and to expand the range of services provided.

12. Institutional strengthening efforts were successful. The four banks believe that theproject helped them identify shortcomings in their appraisal techniques and contributedsignificantly to their improvement. Possibly because of that, the subloans extended under theproject had higher rates of return and better collection ratios than those in the banks' averageportfolios. Term lending in foreign exchange is now an integral part of these financialinstitutions' operations, especially in operations involving export credit agencies and otherbilateral sources.

13. The Bank's performance under the project is also considered satisfactory. Regulardialogue during supervision between Bank staff and the borrower contributed to timelyresolution of problems. The project's outcome is rated as satisfactory. The objectives ofmodernization, retraining, quality awareness, and export growth were largely fulfilled. Exportershave managed to reduce costs, increase productivity, and improve their financial position.

Key Lessons

14. The project provided several important lessons for project operations in India andelsewhere:

* Financial institutions that have been sheltered for a long time by a highly regulatedeconomic framework may need time and assistance to adjust to a changing incentivestructure. Commitment by the borrower and the continuous support of its topmanagement in project implementation are essential to project success.

* Gauging the institutional capacity tc, deal with complex export marketing issues is alengthy process. When designing export credit lines, the Bank should not be overlyoptimistic about how long it will take to establish this expertise. A key element of thisproject was the export development fund for export promotion. Efforts should be madeto reproduce this kind of arrangement in similar loans, but preferably on a self-sustainedbasis.

* The World Bank's willingness to finance export promotion activities in parallel with(rather than after) a comprehensive and well-designed program for trade policy reformsenabled it to be an active participant in the evolving policy dialogue.

* Regular dialogue during project supervision between Bank staff and the borrowercontributed to timely resolution of problems.


INDIA


PROJECT IMPLEMENTATION ASSESSMENT

A. BACKGROUND

1. From independence until 1991, India pursued economic development policies that placeda priority on economic diversification and self-sufficiency. These policies, based on substantialpublic investment in heavy and medium manufacturing, constrained performance by:

. insulating industry from import competition through high tariffs and quantitycontrols on imports;

* limiting domestic competition through a system of administered pricing, whichlimited resource generation;

* reserving certain activities to the public sector;* restricting entry through a system of investment licensing and intense regulation;* restricting foreign investment through a system of ownership guidelines and

technology transfer agreements; and* limiting the operations of foreign-owned enterprises, restraining their growth,

diversification, and financial management.

2. These industrial regulations were often coupled with a complex array of incentives andexemptions intended to influence firms' decisions on location, technology, and the mix of laborand capital. In addition, a highly regulated financial sector increased the cost of capital to privatefirms, while credit allocation policies encouraged inefficient patterns of investment in industry.Publicly owned financial institutions were sheltered from competition, and directed credit toearmarked priority industries and social sectors at subsidized interest rates.

3. The industrial growth and performance that resulted from these policies weredisappointing. Although the manufacturing sector achieved self-sufficiency, by the late 1 970s ithad fallen behind many other developing countries in terms of technology, scale, and efficiency.Moreover, the diversified industrial base was costly to maintain because of the powerful anti-export bias fostered by protectionist trade policies. The domestic market absorbed most output;only the residual was exported, mainly to soft markets in Africa and the former Soviet Union.The only successful exports were in the few sectors that either had easy and duty-free access toimported inputs (like diamonds) or that relied on domestic inputs that were readily available andcheap relative to world prices (like cotton garments and leather products).

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4. By the mid-1980s the Government of India (GOI) recognized the need to improveindustrial performance and began revising its industrial and trade policies to improve thecompetitiveness and export performance of the manufacturing sector. In March 1985 significantinstitutional and policy changes were announced, including adoption of a more flexible exchangerate regime conducive to export growth, partial liberalization of the industrial regulatory regime,reduction in taxes and tariffs on imports of capital goods, institutional changes to the importlicensing system, and gradual phasing out of quantitative restrictions. These measures set thestage for the World Bank to play an active role in India's transition to a more market-orientedeconomy through a continuous policy dialogue with GOI and a series of lending operationsaimed at increasing the industrial sector's efficiency.

5. The initial reforms, however, were insufficiently comprehensive. In its dialogue withGOI, the Bank advocated further measures, including adopting a more realistic exchange rate,increasing competition through relaxation of import controls, eliminating capacity licensingrestrictions for new entrants, and abolishing the system of pricing and distribution controls. GOIcommitted itself to sustaining and building on the gains obtained from market-oriented policiesby providing further incentives to firms to stimulate efficiency and adopt export-orientedstrategies.

6. Still it took until 1991, when unprecedented fiscal and external imbalances put India onthe verge of defaulting on its external debt obligations, for a more thorough reform effort to bedesigned and implemented. A comprehensive stabilization program and a major reorientation ofIndia's development strategy saw trade and payment regimes significantly liberalized. Almostall areas of the economy were opened to domestic and foreign private investment. Importlicensing restrictions on intermediate and capital goods were virtually eliminated, while tariffswere substantially reduced. In the financial sector, barriers controlling the entry of private banks(domestic and foreign) were lowered, prudential regulations closer to international standardswere introduced, banks were given more discretion in making lending decisions, and financialmarkets were liberalized. In August 1994 the rupee was made fully convertible for currentaccount transactions.

B. PROJECT OBJECTIVES

7. The Export Development Project (EDP) was designed to help GOI carry out its strategyof increasing the competitiveness and exports of manufactured products, thus providing the basisfor continued active dialogue between GOI and the Bank on administrative and trade policyreforms. In addition, the EDP was intended to build institutional capacity within the Indianfinancial system by helping financial institutions improve their abilities to assess export projects,mobilize the resources needed to finance such projects, and provide direction and advice to theirclients on export issues and markets.

8. Prior to the EDP, the World Bank had made 19 development finance loans totalingUS$1.4 billion to private Indian firms engaged in all sectors of industrial activity. These fundswere channeled through domestic financial intermediaries, mainly the Industrial Credit andInvestment Corporation of India (ICICI) and the Industrial Development Bank of India (IDBI).

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The EDP is the direct follow-up to an earlier Bank loan of US$250 million for the IndustrialExport (Engineering Products) Project (IEP) (Loans 2629/30-IN), which was implementedthrough ICICI, the Export-Import Bank (EXIM), and four participating commercial banks. Thatloan, which became effective on June 23, 1986, and closed on June 30, 1992, included arelending component through the ICICI to support investments in exportable engineeringproducts and through four participating commercial banks to support investments in ancillaryengineering enterprises and a productivity fund in the ICICI and an export marketing fund inEXIM to finance the operational upgrading and export marketing activities of engineeringenterprises.

9. Implementation of the IEP started slowly because it took most commercial banks sometime to put in place procedures and staff to use the loan. Three years after Board approval, loancommitments were only 29 percent of the amounts estimated at the time of Board presentation,and loan disbursements were only 13 percent of appraisal estimates. Moreover, since GOIinitially absorbed the foreign exchange risk on subloans to ancillary firms only, initialcommitment of the ICICI loan was slow because sub-borrowers were reluctant to assume theforeign exchange risk. In February 1988 the project was modified to allow GOI to bear theforeign exchange risk related to the relending component. The rate of commitment was furtherimproved by widening the use of funds to cover all export projects, rather than focusingprimarily on engineering products.

10. Building on the experience gained under IEP, the EDP included three enhanced featuresin its design. First, it combined the activities covered by the export marketing fund and theproductivity fund into a single multipurpose export development fund placed in eachparticipating institution. Second, it established a technical assistance fund to strengthen thecapabilities of financial institutions in designing, implementing, and appraising exportdevelopment projects and export-oriented investments. Third, it included two leadingcommercial banks in order to diversify project support to smaller and more geographicallydispersed firms.

11. To achieve its objectives, the project assisted four financial institutions--the ICICI,EXIM, Bank of Baroda, and Canara Bank--through:

* An export development fund (EDF) of US$20 million allocated to the four financialinstitutions to finance the marketing and technical services and foreign travelexpenses associated with the preparation and implementation of client firms' exportdevelopment programs. Based on the experience gained under the IEP, the projectsfinanced by this fund were expected to generate incremental exports worth more thanten times the EDF's original investment;

* A technical assistance fund (TAF) to help strengthen the financial institutions'capacity to appraise export projects and advise firms on export strategy issues. TheJapanese Grant Facility (Grant 2727) provided an amount equivalent to US$2.7million to GOI, which passed the funds on to the institutions on a nonreimbursablebasis; and

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* a line of credit for term lending to finance export investment projects conducted undertwo different loans: a US$175 million loan for the ICICI and a US$100 million loanfor EXIM and the two participating commercial banks (collectively referred to as the"participating commercial banks" or PCBs). This component was expected toprovide long-tern finance to about 350 subprojects, resulting in total investments ofabout US$730 million. The subprojects financed by the financial intermediaries wererequired to have an economic rate of return of 12 percent.

12. During appraisal project costs were estimated at US$730 million equivalent, of which theInternational Bank for Reconstruction and Development (IBRD) financed US$295 million tocover the foreign exchange portion of the EDF and the term lending component in the fourfinancial institutions. As mentioned above, the TAF was financed through a grant from theGovernment of Japan.

13. Export Development Fund. The EDF was designed to encourage Indian firms topurchase foreign expertise and information and to help them develop an export development planby giving them matching grants to finance export promotion activities. The fund provided firmswith grant support on a matching basis for a range of pre-investment promotion and marketingactivities within a structured firrn-level export development plan; one-window clearance throughan established steering committee for the various Government approvals required for exportmarketing and product adaptation activities; and term finance and incremental working capitalfinance to implement an export development plan. Firms were assisted by the advisory servicesprovided by the participating institutions and encouraged to structure their export developmentplans in three distinct phases comprising market exploration, product adaptation, and salespromotion. The four institutions managed, on behalf of GOI, US$20 million in exportdevelopment funds allocated as follows: US$7 million through the ICICI, US$7 million throughEXIM, US$3 million through Bank of Baroda, and US$3 million through Canara Bank.

14. Technical Assistance Fund. The TAF supported strengthening the financial institutionsexport programs rather than the exporters themselves. Activities funded through the TAFincluded training abroad for staff, particularly those involved in managing the exportdevelopment fund; purchase of marketing and technical information from international databanks to support appraisal activities in cases where an assessment of overseas market potentialwas required; and fees and travel expenses for hiring of specialist consultants. The Japanesegrant financed the foreign exchange costs of the activities, which at appraisal were estimated tobe about 75 percent of total costs. The initial budgeted amount was US$2.7 million, allocated asfollows: US$1,175,000 to the ICICI, US$675,000 to EXIM, US$425,000 to Bank of Baroda, andUS$425,000 to Canara Bank.

15. Term Lending Component. A line of credit of US$275 million was made available tothe four institutions to provide term financing to non state-owned enterprises (private, privatizedand joint ventures) for balancing, modernization, expansion, and new investment that metfinancial, economic, and export-orientation criteria. These criteria required that a satisfactorystrategic export plan be prepared, that all subprojects have a minimum economic rate of return of

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12 percent and a financial rate of return of 15 percent, and that subloan maturities be at least 3years and no more than 15 years.

16. The term lending through financial intermediaries was conducted under two differentBank loans. The first, for US$175 million, was provided to the ICICI (Loan 3059-IN) and wasto be relent to large firms as foreign exchange at the Bank's standard variable interest rate plus 2percent, or as rupees at the prevailing rate under the exchange risk administration scheme(ERAS). This scheme was a currency pool arrangement intended to provide a measure ofprotection to borrowers against interest and foreign exchange risks and to distribute the cost ofsuch protection equitably among borrowers. Under the ERAS the spread between the interestrate on the Bank loan and the rate under the scheme (less 2 percent for ICICI's spread) wouldaccrue to the ERAS fund to cover the risk of interest and exchange rate fluctuations. Thescheme's interest rate was adjusted every six months to ensure that both risks were adequatelycovered. Under this term lending component the Bank was to finance 40 percent of project costs(representing the average foreign exchange costs of medium-size and large subprojects in India),the ICICI was to finance about 10 percent of sub-project costs from its rupee resources, othercapital and credit market sources were expected to provide another 20 percent, and subprojectsponsors and other equity subscribers were to provide equity financing for the remaining 30percent.

17. The second Bank loan (Loan 3058-IN), for US$100 million, was provided to GOI to bepassed on as equity to the PCBs (EXIM, Bank of Baroda, and Canara Bank). Their clients wereto be small and medium-size firms, and the final interest rates to sub-borrowers were to beconsistent with the interest rate structure of the Reserve Bank of India for term lending to thesesectors: 13.5 percent for small firms and 14.0 percent for medium-size firms. The originalallocation of this lending component was as follows: US$40 million to EXIM, US$30 million toBank of Baroda, and US$30 million to Canara Bank. All subloans were to be denominated inrupees, and GOI assumed the foreign exchange and interest rate risks. For EXIM subprojects theBank was to finance 50 percent of the project costs corresponding to the expected foreignexchange requirement, EXIM was to finance about 10 percent of these costs, and the rest was tocome from the sponsors and equity sources. For Bank of Baroda and Canara Bank subprojects,the Bank was to finance 35 percent of project costs, the banks would contribute 30 percent, andsponsors and other equity sources would finance 35 percent.

C. ACHIEVEMENT OF PROJECT OBJECTIVES

18. The project's objectives were well conceived and have been successfully achieved despitechanges in the macroeconomic environment that were difficult to predict at the time ofpreparation and appraisal. At project closure US$189 million had been withdrawn and US$2.9million remained uncommitted. The total foreign cost of the project (including funds providedby domestic sources and cofinancing institutions) was US$202.5 million; the rest was releasedfor payments in local currency. The devaluation of the rupee during project implementation(from Rs. 13.0 to Rs. 31.5 to the US dollar) reduced the local currency component expressed indollar terms.

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19. ICICI component. The ICICI component provided US$76.3 million for subloans to 102companies. Preliminary data available during the ICR mission suggest that the average loan wasUS$748,000, total investment cost was US$495 million, and 17,050 jobs were created.

20. Participating commercial banks component. This component provided US$96 millionfor subloans to 240 companies. Based on preliminary data available during the ICR mission, thefunds were disbursed as follows:

* EXIM committed US$30.1 million and disbursed about US$28.0 million to 46 small andmedium-size companies. The average loan was US$635,000 and the average financialrate of return expected at appraisal was 34 percent. There were three full cancellationsand two projects with long-term arrears.

* Bank of Baroda committed US$49.85 million and disbursed US$45.5 million to 113small and medium-size companies (average sales of about US$7 million). The averageloan was US$441,000 and the exports generated over the past three years exceededUS$260 million. About 60 percent of the companies are located in small towns orbackward areas. There were 5 full cancellations and 11 projects with long-term arrears.At the end of fiscal 1996, 37 units were performing below expectations, though more thantwo-thirds of them were regular in meeting their term liabilities.

- Canara Bank committed US$24.8 million and disbursed about US$22.0 million to 84mostly small and medium-size companies (average sales of about US$6 million). Theaverage loan was US$262,000 and the average financial rate of return expected atappraisal was 31 percent. There were 12 full cancellations, 4 projects with long-termarrears, and 18 defaults.

21. Subprojects financed under the term lending component were expected to have aminimum economic rate of return of 12 percent. The actual performance of subloans variedacross subsectors and institutions, with financial rates of return ranging from 12-60 percent andeconomic rates of return ranging from 13-40 percent. Repayment performance has beensatisfactory and consistent with each implementing agency's overall portfolio performance.With the exception of Canara Bank, collection ratios were higher than 85 percent.

22. Export developnent fund component. The EDF supported marketing programs forabout 450 companies. Despite a slow start, overall implementation was satisfactory. Theaverage grant was US$36,725. Small, medium, and large firms were assisted. Available dataindicate that at the end of fiscal 1996 the ratio of actual incremental export earnings to grants hadlargely exceeded the target of 10:1. In the case of EXIM the export multiplier during fiscal1992-1995 was 102 times on a weighted average basis, the ratio of exports to sales among theassisted companies increased from 8.8 percent in fiscal 1992 to 11.4 percent in fiscal 1995, andthe average growth in exports of the assisted companies between 1992 and 1995 was 26 percent,compared with average growth of 15 percent for Indian exports during the same period.

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23. The ICICI committed US$7.5 million under the export development fund and disbursedabout 70 percent of this amount to more than 100 companies. EXIM overcommitted itsallocation (with Bank approval) to maximize utilization of this fund: US$7.4 million wascommitted to 118 companies, although only about 85 percent of this amount was disbursed. Theaverage grant was US$61,513. The other participating banks were slower to commit theirallocations and to disburse the sanctioned amounts. Bank of Baroda received US$3.38 millionunder the fund. As of December 1995, 94 projects had been approved but nearly US$1 millionremained undisbursed because Bank of Baroda chose to release these disbursements only afterreceiving proof that incremental exports over the previous five years amounted to ten times thegrant. During the ICR mission Bank of Baroda decided to expedite disbursements during thefour-month grace period for activities that took place before the closing date. Similarly, CanaraBank disbursed only about 60 percent of its original commitments of US$3.04 million to 100projects. The average grant was US$17,900.

24. Technical assistance fund component (Japanese Grant Facility). About US$2.6 millionwas spent on this program from an initial allocation of US$2.7 million. The fund originallysupported training for all implementing agencies to upgrade staff skills in the area of exports.After three years with no disbursements, the scope of the fund was widened. EXIM wasparticularly active, producing studies on sectors with good export potential and establishing twooverseas service centers (in Rome and Budapest) in 1994 to collect marketing information forIndian companies and identify joint venture opportunities. EXIM's final utilization of fundsamounted to US$1.043 million, as authorized by the Bank. The ICICI disbursed US$0.99million, mainly for training under the Arthur D. Little program, while Canara Bank used theentire allocated amount for training abroad. Bank of Baroda was slow to submit proposals to theBank, and used about US$0.15 million.

D. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT

25. Overall assessment of project implementation. The loan was approved on May 12, 1989,and became effective on September 21, 1989. The original closing date of the loan was March31, 1996, and no extensions were required. Project implementation proceeded without majorproblems because the experience acquired by the participating financial institutions during theIEP enabled them to implement the project without making major adjustments to theiroperations. Additionally, since no specific industrial sectors were targeted by the project, eachbank was able to fully direct the available funds to its existing client base or to marketaggressively the credit line in order to expand it.

26. Issues affecting implementation related to the design of the TAF and the ERAS. First,the technical assistance fund was less successful than the export development fund. Despite agood start in 1991 with a group training scheme for the four banks, the fund's activities werelimited because its design was inadequate. After three years with no disbursements the scope ofthe TAF was widened, and most of it was eventually disbursed. Second, implementation of thetwo credit lines followed different patterns as a consequence of the separate on-lending terms andconditions. The main factor affecting implementation of the project was the collapse of the

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ERAS following the rapid depreciation of the rupee. When it became clear that there was noviable alternative, the undisbursed funds were canceled.

27. Dif.ficulties in implementing the ICICI term lending component. Until 1986 foreigncurrency lending by the major development financial institutions was made on a back-to-backbasis, with a markup of 1.5 percent to cover administrative costs and risks. Interest rate andforeign exchange risks were borne by the sub-borrowers. Given the steady depreciation of therupee and volatility of foreign exchange rates during the second half of the 1 980s, however, sub-borrowers found themselves facing extremely high and often unpredictable effective repaymentrates. The absence of a well-developed forward foreign exchange currency market in Indiameant that private borrowers had limited means for protecting themselves against such risks. Asa result demand for foreign currency-denominated loans greatly declined, while the weaknessesof the private firms' debt servicing capacities negatively affected the portfolios of the lendinginstitutions.

28. GOI agreed to bear the interest rate and foreign exchange risks for the PCBs, but not forthe ICICI. GOI was particularly intent on meeting the growing demand for term credit by thesmall and medium-size clients of the commercial banks because of these clients' potential forstimulating industrial expansion. GOI required that the terms of this lending be revisedperiodically in order to avoid subsidies. During project implementation interest rates weremostly positive in real terms and were consistent with other lending sources (except in 1991,when the Reserve Bank raised the commercial banks' minimum lending rate to 18.5 percent).

29. Accordingly, the PCBs' component disbursed smoothly, especially when other importfinancing became scarce in the 1991 foreign exchange crunch. However, an overcommitment ofthese funds led to an April 1991 loan amendment that created a pool fund available to allparticipants on a first-come, first-served basis. This fund was repeated one year later. Bank ofBaroda made maximum use of these reallocations. This was, incidentally, doubly advantageousbecause the funds the PCBs committed ultimately were transformed into equity, helping them tocomply with the new Basle capital adequacy standards.

30. In the case of the ICICI, the authorities' views were determined more by long-termfinancial sector aims. They believed that it was important to terminate coverage of foreignexchange risk for long-term rupee lending, a view with which the Bank concurred. To this endthe Indians proposed a single currency loan system, which was rejected because such systemswere not being offered by the Bank at the time. Bank staff believed that the optimum solutionwas to have a system without foreign exchange controls and with market-determined interest.They understood, however, that India was not yet ready for such as system and, in particular,lacked a forward foreign exchange market to help borrowers protect themselves. TheGovernment and the Bank eventually agreed that using the ERAS to manage foreign exchangerisk was an acceptable second best solution. In any case, the scheme was considered superior tothe revised IEP's on-lending formula.

31. Thus two alternatives were made available to borrowers under this credit line: the Bank'sstandard foreign currency-denominated lending in a pool of currencies, with the final beneficiary

9

bearing the foreign exchange risk, and the ERAS, a currency pooling system introduced by GOIin April 1989 for the foreign commercial borrowings of major development financial institutions.The ERAS aimed to increase the demand for foreign exchange-denominated term lending byproviding a measure of protection to borrowers against interest and exchange rate risk anddistributing the cost of such protection equitably among the borrowers. Under the ERAS,borrowers paid a rupee-denominated rate comprising the weighted average interest costs of thedevelopment financial institutions' foreign borrowings, a premium based on the estimatedforeign exchange risks, and the development financial institutions' intermediation spread of 2percent. The scheme commenced with an initial rate of 15 percent (1 percent above theprevailing term lending rate of the time), and the rate was reviewed every six months andadjusted to cover the foreign exchange and interest rate costs (based on international interest rateand currency movements). GOI agreed to cover any short-run deficits of the fund caused bylarge interest rate or exchange rate fluctuations.

32. Unfortunately, the designers of the ERAS could not anticipate the 47 percent rupeedepreciation in 1989-91, which caused annual interest rates paid under the ERAS to rise to 26percent and rendered effective repayment rates unaffordable. As a result the ICICI's line ofcredit stalled. The introduction of partial convertibility of the rupee gave exporters no incentiveto pay above-market rates on fixed loans, and borrowing companies' lack of familiarity with theBank's currency pool made them reluctant to take on exchange rate risk at a time of rapid rupeedevaluation. In 1992 GOI and the Bank discussed alternative interest rate formulas that mightovercome the shortcomings of the ERAS but failed to reach agreement. Because the ICICI couldnot assume the foreign exchange risks and the Bank could not retroactively alter currency poolarrangements under existing loans, GOI and the Bank decided to discontinue the scheme inFebruary 1993, leading to the cancellation of US$98.7 million. This adjustment reduced theamount of the ICICI component financed by the Bank to US$76.3 million.

E. PROJECT SUSTAINABILITY

33. Prospects for project sustainability are very favorable. The project led to substantialinvestment in India's export industries. It also helped the participating development financialinstitutions gain valuable experience in promoting export marketing and quality-enhancingactivities. Moreover, GOI seems committed to the ongoing reforms.

34. Benefits to sub-borrowers. The EDP was very attractive to sub-borrowers because itprovided access to term credit, allowing for the purchase of imported capital goods during aperiod of extreme scarcity of foreign exchange (especially in 1991) and provided rupee-denominated funds at very reasonable real interest rates relative to other sources of domesticcurrency. The loan contributed to the export companies' modernization efforts, increasing theirability to compete with foreign during a critical transition period. Additionally, it helped severalsmall and medium-size companies to expand aggressively through export-led growth. The EDPwas particularly useful for new entrepreneurs and new exporters because few other sources offunds were available to them.

10

35. The EDF provided several exporting firms with financial and technical assistance inpursuing marketing activities that were crucial to their expansion, but that otherwise wereunlikely to have taken place because of constraints in access to foreign exchange. The fund alsosharpened the export awareness and penetration of Indian companies in the world market,moving them away from volume-oriented activities to an approach focused on quality and clientresponsiveness. It helped them formulate structured market entry development plans andencouraged strategic alliances for increased exports and product upgrades. Eleven medium-sizecompanies assisted by EXIM under the program have set up overseas ventures in manufacturing,marketing, or trading in countries like Hungary, Ireland, Malaysia, the Netherlands, Russia, andthe United Kingdom.

36. Benefits to financial intermediaries. The performance of the four financial institutionsinvolved in the project and the changes observed in their internal procedures and organization--making them more commercially oriented and more responsive to the clients' requirements--must be understood within the context of India's evolving economic environment since 1991.The EDP improved the financial institutions' capabilities to assist clients in export-orientedactivities, to widen their client base, and to expand the range of services provided. It played acatalytic role for sub-borrowers with other sources of finance (especially working capital). Italso had the additional advantage that the Bank's loan to GOI was passed on to the financialintermediaries as equity.

37. Through their association with the Bank the financial institutions improved their ability toformulate well-conceived lending programs, to adopt a firm-level approach and widen theircustomer base, to prepare detailed systems and operating procedures, to structure responseprocesses and time schedules, and to implement account administration and monitoringmechanisms. The Bank also helped sharpen financial appraisal skills and introduced the need forappraisal of international markets and strategies.

38. Overall, the implementing banks believe that the project helped them identifyshortcomings in their appraisal techniques and contributed a great deal to improving them.Possibly because of that, some of the banks believe that the subloans extended under this creditline had higher rates of return and better collection ratios than other loans in their portfolios.Although they are still Government-owned, the financial institutions are in a position to raiseresources from markets, in India and abroad, based on their financial performnance. Term lendingin foreign exchange is now an integral part of their operations, especially for operationsinvolving export credit agencies and other bilateral sources.

39. Moreover, institutional strengthening efforts were successful. The implementing banks'technical and financial performance has improved substantially. Under the EDF the financialinstitutions were expected to develop, strengthen, and broaden the scope of expertise in export-related activities. They are now selling technical expertise in the form of consultancy services:

* The ICICI used the grant funds to redefine its export strategy. It created an exportdivision, now part of the Advisory Services Group, to assist companies in their exportstrategies.

11

* EXIM has decided to launch a third export development program, including term lending(in dollars) and grant funds, essentially financed by internal funds. EXIM also hascreated an Exporter's Club and now provides integrated services to potential borrowersfor a fee. EXIM also has set up a training center to provide specialized workshops andseminars on international trade and investment-related subjects for export executives ofsmall and medium-size companies. The know-how EXIM developed under the EDF isnow being used in other Bank projects.

* Bank of Baroda and Canara Bank created divisions to deal with the financing of exportprojects and used the TAF to buildup their internal skills. Both banks are planning toexpand the advisory services provided to their clients on a fee basis.

F. BANK PERFORMANCE

40. The Bank's performance was satisfactory in identification, preparation, appraisal, andsupervision. At the identification stage the Bank correctly diagnosed what was ailing theindustry and, working with GOI, identified appropriate solutions. Appraisal identified projectgoals and established concise project objectives consistent with the overall sector strategy.Supervision missions visited India regularly, obtaining expertise from the same individuals overtime. During the ICR mission the four financial institutions and their sub-borrowers expressedsatisfaction with the Bank's timely assistance and advice. Additionally, the Bank has maintaineda lively dialogue with GOI on trade policy reform.

G. BORROWER PERFORMANCE

41. The performance of the borrower is considered satisfactory. The management of thefinancial institutions involved were fully committed to successful implementation of the project.Moreover, regular dialogue during supervision between Bank staff and the borrower contributedto timely resolution of problems.

H. ASSESSMENT OF OUTCOME

42. The project outcome is rated as satisfactory. The objectives of modernization, retrainingand export growth were largely fulfilled. Exporters managed to reduce costs and increaseproductivity, improve their financial position, and enhance their international competitiveness.The implied objective of a more competitive market also has been achieved. Many of theindustrial, fiscal, and export policy initiatives adopted since 1992 represent marked departuresfrom earlier practice. There has been significant progress in industrial delicensing, in easingregulations on large firms that want to expand or change their product mix, in opening areaspreviously reserved for small-scale industry, and in deregulating foreign technology andinvestment collaborations.

12

43. The implementing banks substantially improved both their appraisal and financialperformance. Sub-borrowers were satisfied with the overall performance of the financialinstitutions in terms of timing, service quality, and lending conditions, although most of themregret that there is no real competition in India's banking industry. Finally, it is worth notingthat the first projects approved under the EDP faced different economic conditions that raisedtheir cost of capital relative to projects approved after the structural reforms in 1991.

I. FUTURE OPERATIONS

44. In 1991 the World Bank's financial sector operations were considerably reoriented in linewith new norms calling for broader sector policies. As a result the Bank has not scheduled anyfurther lending to export development in India. Although most financial intermediariesrequested a follow-up operation, they recognize that they now have easier access to other foreignsources of funds. However, Bank intervention would still be helpful to promote new operationssimilar to the export development fund. These new funds would no longer need to proceed on amatching grant basis, however, but on terms allowing for the self-sustainability of themechanism. The Bank Group could also assist export development in India by supportingprivate infrastructure investments with loan and guarantees.

J. KEY LESSONS

45. The project provided several important lessons for project operations in India andelsewhere:

e Financial institutions that have been sheltered for a long time by a highly regulatedeconomic framework may need time and assistance to adjust to a changing incentivestructure. Commitment by the borrower and the continuous support of its topmanagement in project implementation are essential to project success.

* Gauging the institutional capacity to deal with complex export marketing issues is alengthy process. When designing export credit lines, the Bank should not be overlyoptimistic about how long it will take to establish this expertise. A key element of thisproject was the EDF for export promotion. Efforts should be made to reproduce this kindof arrangement in similar loans, but preferably on a self-sustained basis.

* The World Bank's willingness to finance export promotion activities in parallel with(rather than after) a comprehensive and well-designed program for trade policy reformsenabled it to be an active participant in the evolving policy dialogue.

* Regular dialogue during project supervision between Bank staff and the borrowercontributed to timely resolution of problems.

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ANNEX I

STATISTICAL TABLES

Table 1: Summary of AssessmentsTable 2: Related Bank Loans and CreditsTable 3: Project TimetableTable 4: Loan Disbursements: Cumulative Estimated and ActualTable 5: Key Indicators for Project ImplementationTable 6: Key Indicators for Project AchievementsTable 7: Studies Included in ProjectTable 8A: Project CostsTable 8B: Project FinancingTable 9: Economic Costs and BenefitsTable 10: Status of Legal CovenantsTable 11: Compliance with Operational Manual StatementsTable 12: Bank Resources: Staff InputsTable 13: Bank Resources: MissionsTable 14: Selected Indicators of Subloan AchievementsTable 15: Selected Indicators of Export Development Fund Achievements

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Table 1: Suminary of Assessments

A. Achievement of Objectives Substantial Partial Negligible

Macroeconomic policiesSector policies /Financial objectivesInstitutional developmentPhysical objectives /Poverty reduction /Gender concerns /Other social objectives VEnvironmental objectivesPublic sector management V/Private sector development V

B. Project sustainability Likely Unlikely Uncertain

HighlyC. Bank performance satisfactory Satisfactory Deficient

Identification VPreparation assistanceAppraisal VSupervision V

HighlyD. Borrower perfonnance satisfactory Satisfaory Deficie

Preparation VImplementation V/Covenant compliance V

HighlyE. Assessment of outcome satisfactory Satisfactory Unsatisfactory

I/

15

Table 2: Related Bank Loans and Credits

Loan or credit name Purpose Year of Statusapproval

Preceding operations

Industrial Export Project- Support trade policy reform and 1986 Closed in 1992; ICR inEngineering Products increase the supply of 1993; OED audit in 1996.(Loans 2629-IN and 2630- investment funding for export-IN) oriented projects and export

promotion activities

Following operations

Financial Sector Greater market orientation, 1995 Undisbursed $544 millionDevelopment (Loans. allocate efficiency, technical3856/57/58-IN) competence, and competition in

financial system

Table 3: Project Timetable

Actual date/Steps in project cycle Date planned latest estimate

Identification ; 09/20/87Preparation 05/20/88Appraisal 11/12/88Negotiations 03/27/89Board presentation _ 05/12/89Signing _ 05/26/89Effectiveness 09/21/89Project completionLoan closing 03/31/96 03/31/96

16

Table 4: Loan Disbursements: Cumulative Estimated and Actual(US$ million)

FY90 FY91 FY92 FY93 FY94 FY95 FY96

Appraisal estimate 33.4 99.4 176.4 262.4 286.4 295.0 295.0

Actual 26.7 56.7 138.0 183.7 186.8 188.9 188.9

Actual as % of estimate 79.9 57.0 78.2 70.0 65.2 64.0 64.0

Date of final disbursement - - - - 6/96

Table 5: Key Indicators for Project Implementation

|. Key implementationindicators in Estimated ActualSAR/President's Report

1. Term lending: number of The project would extend The project has extended somesub-borrowers US$275 million to 350 firms, US$170 million to more than

resulting in total investment of 330 firms, resulting in totalUS$730 million investment of US$858 million

2. Export development fund: US$200 million More than US$800 millionincremental exports l

II. Modified indicators (if Noneapplicable)

III. Other indicators (if Noneapplicable) I _ _ _ _ __ _ _ _I__ _ _

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Table 6: Key Indicators for Project Operation

Type of Indicator Estimated Actual

I. Key operating indicatorsin SAR/President's Report None

11. Modified indicators (if Noneapplicable)

Ill. Modified indicators for Nonefuture operation (if applicable) I

Table 7: Studies Included in Project

Purpose as definedName of study at appraisal/redefined Status Impact of study

N.A.I =

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Table 8A: Project Costs(US$ million)

Appraisal estimate Actual/latest estimateLocal Foreign Local Foreign

Item costs costs Total costs costs TotalTerm Credit:ICICI 270.00 175.00 445.00 418.68 76.32 495.00EXIM 39.60 40.00 79.60 33.23 27.92 61.15Bank of Baroda 50.95 30.00 80.95 66.28 38.99 105.27Canara Bank 50.95 30.00 80.95 119.35 40.33 159.68

Subtotal 411.50 275.00 686.50 637.54 183.56 821.10

EDF:ICICI 7.00 7.00 14.00 5.25 5.25 10.50EXIM 7.00 7.00 14.00 7.44 7.44 14.89Bank of Baroda 3.00 3.00 6.00 2.00 2.00 4.00Canara Bank 3.00 3.00 6.00 2.25 2.45 4.70

Subtotal 20.00 20.00 40.00 16.94 17.14 34.09

TAF.ICICI 0.40 1.20 1.60 0.33 0.66 0.99EXIM 0.30 0.70 1.00 0.35 0.70 1.05Bank of Baroda 0.15 0.40 0.55 0.11 0.14 0.25Canara Bank 0.15 0.40 0.55 0.09 0.35 0.44

Subtotal 1.00 2.70 3.70 0.88 1.85 2.73TotalCost 432.50 297.70 730.20 655.36 202.55 857.91

Table 8B: Project Financing(US$ million)

Appraisal estimate Actual/latest estimateLocal Foreign Local Foreign

Source costs costs Total costs costs Total

IBRD 295.00 295.00 188.51 188.51Cofinancing

institutions 2.70 2.70 2.70 2.70Domestic

contribution 432.50 432.50 655.36 11.34 666.70

Total Cost432.50 297.70 730.20 655.36 202.55 857.91

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Table 9: Economic Costs and Benefits

Subprojects financed by the financial intermediaries were to have a minimum economic rate ofreturn of 12 percent. The actual performnance of subloans varied across subsectors andinstitutions, with financial rates of return ranging from 12-60 percent. The average financial rateof return was 28 percent for EXIM and 31 percent for Canara Bank.

Table 10: Status of Legal Covenants

Original RevisedLoan Covenant Present fulfillment fulfillment Description ofAgreement Section type status date date covenant

3058-IN 4 (a) I C Furnish audits of project subloans (EXIM,Bank of Baroda, Canara Bank)

4 (b) 1 C Furnish audits of EDF accounts (ICICI,EXIM, Bank of Baroda, Canara Bank)

3059-IN 4.01 1 C ICICI to provide financial statements auditreport (including on the special account)and Statement of Expenses within fourmonths of fiscal year end

4.02+ 2 C ICICI to maintain debt-equity ratio of notmore than 12, and DSCR of at least 1.2:1

C - Complied withDSCR - Debt service coverage ratio

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Table 11: Compliance with Operational Manual Statements

Statement number and title Describe and comment on lack ofcompliance

No known lack of compliance

Table 12: Bank Resources: Staff Inputs

State of Planned Revised Actual

project cycle Weeks US$ Weeks US$ Weeks US$000 000 000

Through appraisal 146.4 315.6 146.4 315.6 146.4 315.6

Appraisal through 18.0 49.7 18.0 49.7 18.0 49.7Board approval

Board approvalthrougheffectiveness

Supervision 35.0 98.8 42.4 86.7 61.3 247.5

Completion 47.3 23.6 11.4 1.1

TOTAL 199.4 464.1 718.2 475.6 225.7 623.8

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Table 13: Bank Resources: Missions

Performance rating

Stage of Number Days Specialized Implemen- Develop-project Month/ of in staff skills tation ment Types ofcycle year persons field represented status impact problems

Throughappraisal

AppraisalthroughBoardapproval

Boardapprovalthrougheffective-ness

Super- 02/90 3 24 Econ. 1 1vision 02/91 3 45 Econ. I 1

07/92 2 14 Fin. Econ. 2 1 Exchange Rate12/92 1 20 Fin. 3 3 Exchange Rate08/93 1 10 Fin. 2 212/93 1 17 Fin. 2 207/94 1 5 Fin. HS HS07/95 1 5 Fin. HS HS

Comple-tion 04/96 3 35 Econ. Fin. HS HS

1=HS - Highly satisfactory

2 - Satisfactory

3 - Problem Project

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Table 14: Selected Indicators of Subloan Achievements

Indicator ICICI Bank of Canara EXIM TotalBaroda Bank

Amount committed (US$ million) 112.8 49.9 24.8 30.1 217.6Amount disbursed (US$ million) 76.3 45.5 22.0 27.9 171.7Number of loans 102 113 84 47 346Number of companies 102 113 83 46 344Average loans (US$) 748,000 441,000 262,000 635,000 496,000Average sales of companies (Rs. million) n.a. 228 187 1,862Average financial rate of return (percent) n.a. n.a. 31 34Number with long-term arrears or n.a. 1 1 4 2 l

reschedulingsa l

Number of full cancellations 17 5 12 3 3Additional jobs created 17,050 5,000 4,500 1,500 28,050

a -- long-termn arrears are arrears over one year.

Table 15: Selected Indicators of Export Development Fund Achievements

ICICI Bank of Canara EXIM TotalBaroda Bank l

Amount commnitted (US$ million) 7.50 3.38 3.04 7.44 21.36Amount disbursed (US$ million) 5.25 2.00 1.79 7.44 16.48Number of loans 131 89 100 129 449Number of companies 123 89 97 121 430Average loans (US$) 40,100 26,900 17,900 65,500 36,700Incremental exports n.a. n.a. 42 times 102 times

ANNEX 2

IMPLEMENTATION COMPLETION REPORT OF:EXPORT DEVELOPMENT PROJECT (LOANS 3058/3059-IN)

INDUSTRIAL FINANCE AND TECHNICAL ASSISTANCE PROJECT (LOAN 2928-IN)

AIDE-MEMOIRE

1. A World Bank mission consisting of Messrs. Paul Beckerman (SA2CI) (whoaccompanied the mission only in Bombay), Paulo de Sa (IENIM), Herman Nissenbaum(Consultant), and Ms. Lin Chin (SA2CI) visited India from March 31 to April 11 to prepare theImplementation Completion Report (ICR) of the Export Development Project (Loans 3058/3059-IN) as well as the Industrial Finance and Technical Assistance Project (Loan 2928-IN). It alsomet with the management of the Steel Authority of India Ltd. (SAIL) in New Delhi. Themission met with all five implementing financial institutions -- Industrial Development Bank ofIndia (IDBI), Industrial Credit & Investment Corporation of India (ICICI), Export-Import Bankof India (EXIM), Canara Bank, and Bank of Baroda (BOB), as well as with a sample of about 30loan recipients in Bombay, Bangalore and Delhi. This aide-memoire records the views of theBank mission, the implementing agencies and of a sample of sub-borrowers, and discusses theimplementation performance for each component. Preliminary commitment and disbursementfigures based on the data provided by the administering agencies are also included. The missionwould like to thank the implementing agencies for their hospitality and assistance.

2. The Export Development Project had four components: (i) a US$175 millioncredit line administered by ICICI (later reduced to US$76.3 million); (ii) US$100 million forterm loans through three participating banks, the Export-Import Bank of India (EXIM), CanaraBank, and Bank of Baroda; (iii) US$20 million for matching grants to exporters for exportpromotional activities, the Export Development Fund (EDF); and (iv) a US$2.7 millionJapanese Grant (No. 2727) available for technical assistance to the implementing agencies.

3. ICICI Loan Component: The ICICI component has provided US$76.3 millionfor sub-loans to 102 companies. Original plans were for a US$175 million loan that would berelent to sub-borrowers in foreign exchange at the Bank's standard variable interest rate plus 2%or in rupees at the prevailing exchange rate under the Exchange Rate Administration Scheme(ERAS). During implementation, however, the line of credit stalled because of the collapse ofthe ERAS scheme, following the 47% depreciation of the rupee between 1989-1991, and theintroduction of partial convertibility of the rupee. These developments impaired the exporters'incentive to pay above-market rates on fixed loans. On the other hand, the lack of familiarity ofthe borrowing companies with the currency pool arrangement made them reluctant to take onexchange rate risk at a time of repeated devaluation. Borrowers also found the mechanismdifficult to understand. As a result, in February 1993, the Bank and the Government of India(GOI) agreed to cancel the remaining undisbursed amounts, totaling US$98.7 million.Preliminary data provided to the mission show that the average loan size was US$748,000, andtotal investment costs were US$495 million, which generated 17,057 jobs.

4. Participating Banks Loan Component: This component has provided US$97.3millions for sub-loans to 235 companies. The US$100 million loan was originally to beallocated among the participating banks as follows: Eximbank, US$40 million; Bank of Baroda,US$30 million; and Canara Bank, US$30 million. At the request of GOI, in April 1991 the Bankreallocated US$10 million from the share of each participating financial institution to create a

2

pool fund for all the banks to be made available on a first-come, first-served basis. In July 1992,at the request of GOI, the Bank reallocated the remaining uncommitted funds under thiscomponent on a first-come first-served basis. Bank of Baroda took maximum advantage of thisreallocation of funds.

5. Based on the preliminary data transmitted to the mission, the disbursement statusof this component is as follows:

- EXIM committed US$30.1 million and disbursed about US$27 million to 43small and medium companies. The average loan size was US$635,000 and the average financialrate of return expected at appraisal was 34 percent. There were 3 full cancellations, and 3projects with long-term arrears.

- Bank of Baroda committed US$49.85 million and disbursed US$45.5 million to108 small and medium companies (with average sales of about US$7 million). The average loansize was US$441,000 and exports generated over the past three years exceed Rs 8.6 billion.About sixty percent of the companies are located in small towns or backward areas. There were 5full cancellations, and 11 projects with long-term arrears. At the end of FY 1995/96, 37 unitswere performing below expectations, although more than two thirds of them were regular inmeeting their term loan obligations.

- Canara Bank committed US$24.8 million in 84 loans, of which about US$22million were disbursed mainly to small and medium companies (with average sales of aboutUS$6 million). The average loan size was US$262,000 and the average financial rate of returnexpected at appraisal was 31 percent. There were 12 full cancellations, 4 projects with long termarrears, and the number of defaults totaled 18.

9. Export Development Fund (EDF) Grant Component: The EDF component hassupported marketing programs for about 450 companies. The original allocation of funds amongthe participating banks was as follows: ICICI, US$7 million; Eximbank, US$7 million; Bank ofBaroda, US$3 million; and Canara Bank, US$3 million. Overall implementation was highlysatisfactory. The average size of the grant was US$451,190. The firms assisted were small,medium and large in size. On the basis of the available data, the ratio of actual incrementalexport earnings to grants at the end of the FY 1995/96 had largely exceeded the target of I 0-to- 1(37-to-I in the case of EXIM).

10. ICICI committed US$7.5 million and disbursed about 70 percent of this amountto more than one hundred companies. EXIM overcommitted its allocation with the agreement ofthe Bank US$7.4 million was committed to 118 companies, although only about 85 percent ofthis amount was actually disbursed. The average grant size was US$61,513. The otherparticipating banks were slower to commit their allocations and to disburse the sanctionedamounts. Bank of Baroda has received an allocation of US$3.38 million under the EDF. As ofDecember 1995, 94 projects had been approved but nearly US$1 million remained undisbursedbecause Bank of Baroda decided to only release these disbursements after proof that incrementalexports amounting to ten times the grant over five years had taken place. Similarly, CanaraBank only disbursed about 60 percent of its original allocation.

11. Japanese Grant Technical Assistance Fund (TAF) Component: About US$2.6million was spent on this program from an initial allocation of US$2.7 million, distributed as

3

follows: ICICI, US$1.175 million; Eximbank, US$675,000; Bank of Baroda and Canara Bank,US$425,000 each. The grant originally supported a training program for all implementingagencies to upgrade staff skills in the area of exports. After three years of virtually nodisbursements, the component's scope was widened to include sector studies and establishmentof two overseas service centers by EXIM (in Rome and Budapest) to collect market informationfor Indian companies and identify joint-venture opportunities. EXIM's final utilization of fundsamounted to US$ 1.043 million, as authorized by the Bank. ICICI disbursed US$990,000, mainlyfor training under the ADL-CTP program, while Canara Bank utilized virtually the entireallocated amount for training abroad. Bank of Baroda was somewhat slow to submit finalproposals to the Bank, even though it was allowed to do so irrespective of the originalallocations, and utilized approximately US$150,000.

12. Overall Project Implementation: General implementation of the projectproceeded without major problems, especially as the financial institutions' previous experienceunder the Industrial Engineering Project enabled them to disburse the term credit more rapidly.Slow initial disbursement of the two Funds was compensated by intense activity during the lastyear of the Loan. The most important problem during implementation was the failure of theERAS scheme (because of macroeconomic circumstances that were not foreseen at the time theloan was prepared) and cancellation of the remaining funds. In this connection, the borrowingagencies and the financial institutions and sub-borrowers expressed their satisfaction with theBank's timely advice on this problem.

13. During the discussions with the financial institutions, the mission providedadvice and support for the preparation of their respective portions of the ICR.

14. Proiect Results: During the visit to India, the mission was only able to obtainpartial information on the final results of the project. Information was especially limited in thecase of ICICI. All the financial institutions agreed to make available to the Bank the completelist of sub-borrowers, costs and financing for each project, expected financial and economic ratesof return, as well as their performance in improving the banks' collection records no later thanM4ay 15. Nevertheless, the project can be considered to have achieved its main objectives, inspite of the changes in the macroeconomic environment that could not be foreseen at the time ofpreparation and appraisal.

15. The sub-borrowers told the mission that the EDP presented very attractiveconditions. They stressed that (i) provided access to term credit enabling them to purchase ofimported capital goods in a period of extreme scarcity of foreign exchange (especially in 1991);and (ii) made available rupee-denominated funds at reasonable real interest rates. The Loancontributed to the companies' modernization efforts, and helped them prepare to meet foreigncompetition. They said it helped several small and medium companies expand aggressivelythrough exports, at a time when domestic growth was relatively sluggish (1990-1993). It wasfelt that the EDP was particularly useful for new entrepreneurs and starting exporters, as it wasthen the single source of funds available to them.

16. The sub-borrowers were also generally satisfied with the perfornance of thefinancial institutions in terms of timing, service quality, and lending conditions. Most noted thatthe banking industry in India then provided no comparable sources of finance. It should benoted, however, that the changes in the economic environment during the implementation phaseadversely affected the financial performance of the first projects approved. In effect, they

4

incurred high capital costs as a result of: (i) the effect of the devaluation on the costs of importedequipment; (ii) high duties for imported equipment that were subsequently considerably reduced;and (iii) delays in obtaining of Governmental licenses, especially during the period of foreign-exchange scarcity.

17. Under the EDP, several beneficiaries were assisted both financially and withtechnical assistance in marketing activities that proved valuable for their export expansion. Thiscould not otherwise have taken place because of restrictions on access to foreign exchange. TheFund also contributed to sharpening export awareness and penetration by Indian companies inworld markets. It encouraged them to move away from volume-oriented activities toward afocus on quality and on client service.

18. The performance of the financial institutions and the changes observed in theirinternal procedures and organization -- making them more commercially-oriented, and moreresponsive to clients' requirements -- must be understood within the context of the evolution ofIndia's economic environment and sector deregulation since 1991. The EDP contributed toimproving their abilities to assist clients in export-oriented activities, to widening their clientbase, and to expanding the range of services provided. It also had a catalytic role for the sub-borrowers in enabling them to secure other sources of finance (particularly for working capital).

19. Overall, the banks feel that the EDP helped them identify the shortcomings intheir appraisal techniques, and helped them improve internal operating procedures. This mayhelp explain why sub-loans extended under this credit line had higher rates of return and bettercollection ratios when compared to the average performance of their portfolio. Term lending inforeign exchange, especially from export-credit agencies and other bilateral sources, is now anintegral part of these financial institutions' operations.

- ICICI used the grant funds to redefine its strategy in the export business. Itcreated an export cell, now part of the Advisory Services Group, to assist companies in theirexport strategies.

- EXIM has decided to launch a third export development program -- includingterm lending (in dollars) and grant funds -- financed essentially through internal funds. The bankhas also created an Exporter's Club and now provides integrated services to potential borrowersat a fee.

- Participating commercial banks consolidated permanent cells within theirorganizations to deal with financing of export projects and used the TAF to build-up their staffskills. They are now planning to expand the advisory services provided to their clients on a feebasis.

20. On return to Bank headquarters, the mission will prepare the ImplementationCompletion Reports for Loans 2928, 3058 and 3059, drafts of which will be sent to the GOI forreview.

5

Attachment

Selected Indicators of Subloan (Lns.3058/59-IN) Achievements

Indicator ICICI Bank of Canara EXIM TotalBaroda Bank

Amount committed (US$ million) 112.8 49.9 24.8 30.1 217.6Amount disbursed (US$ million) 76.3 45.5 22.0 27.9 171.7Number of loans 102 113 84 47 346Number of companies 102 113 83 46 344Average loans (US$) 748,000 441,000 262,000 635,000 496,000Average sales of companies (Rs. million) n.a. 228 187 1,862Average financial rate of return (percent) n.a. n.a. 31 34Number with long-term arrears or n.a. 11 4 2

reschedulingsaNumber of full cancellations 17 5 12 3 3Additional jobs created 17,050 5,000 4,500 1,500 28,050

a - long-term arrears are arrears over one year.

Selected Indicators of EDF (LnsL 3058/59-IN) Achievements

ICICI Bank of Canara EXIM TotalBaroda Bank

Amount committed (US$ million) 7.50 3.38 3.04 7.44 21.36Amount disbursed (US$ million) 5.25 2.00 1.79 7.44 16.48

Number of loans 131 89 100 129 449Number of companies 123 89 97 121 430Average loans (US$) 40,100 26,900 17,900 65,500 36,700Incremental exports n.a. n.a. 42 tines 102 times

Export Development Project - Lns.3058/59-INIndustrial Finance and Technical Assistance Project - Ln.2928-IN

Implementation Completion Report Mission (April 1 - 12,1996)

List of Officials Met

Industrial Development Bank of India

Mr. S.H. Khan Chairman and Managing DirectorMr. G.P. Gupta Executive DirectorMr. P.S. Subramanyam Chief General ManagerMr. K. Sivaprakasam General ManagerMr. J. John Deputy General ManagerMs. Mythili Ravi Assistant General ManagerMr. K.X.M. John Chief General Manager (Delhi Office)Mr. R. Satyamurthi General Manager (Delhi Office)Mr. Smriti Dhaon Deputy Manager

The Industrial Credit and Investment Corporation of India Ltd.

Ms. Lalita D. Gupte Executive DirectorMr. Ambikapratap Singh Senior Vice-PresidentMr. Mahinder Chugh Senior Vice-PresidentMr. Suneet K. Maheshwari Senior Vice-PresidentMr. N. Sridhar Assistant Vice-PresidentMs. Shubha Kamalsurya Assistant Vice-PresidentMr. Mahesh Rao Deputy ManagerMr. T. Raghavendran Vice-President (Bombay Zonal Office)Mr. S. Ragothaman Zonal Manager (BZO)Mr. Mohit Chaturvedi Assistant Manager (BZO)Mr. N.P. Subramnanian Deputy Manager (BZO)Mr. T.R. K Deputy General Manager

Export-Import Bank of India

Mr. T.C. Venkat Subramanian General ManagerMr. Shankarnarayan R. Rao Deputy General ManagerMr. Rajshekar Singh ManagerMr. Dipankar Basu Assistant ManagerMr. Vinod Goel Manager (Delhi Office)Mr. S. Sridhar Regional Resident Representative

Export Development Project - Lns.3058/59-INIndustrial Finance and Technical Assistance Project - Ln.2928-IN

Implementation Completion Report Mission (April 1 - 12, 1996)

List of Sub-Borrowers Interviewed

Aro Granite Industries Ltd.Parasrampuria Synthetics Ltd.Ballarpur Industries Ltd.Flex Foods Ltd.CT Cotton Yarn Ltd.Kajaria Ceramics Ltd.Eicher Motors Ltd.AKG Acoustics (india) Ltd.Indo - American Hybird SeedsNamaste Exports Ltd.Shenoy Granites (P.) Ltd.Mangal Arts & CraftsAmit Spinning Industries Ltd.Keshavial Talakchand Kaytee Corporation Ltd.Patodia Eurotex GroupOnida Electronics Ltd.DCL Polyesters Ltd.The Andhra Petrochemicals Ltd.Repl Engineering Ltd.Vidyut Metallics ltd.Jain Irrigation Systyms Ltd.The Zandu Pharmaceutical Works Ltd.AFM India Ltd.Protecto Engineering Ltd.Lyka Labs Ltd.Royal Cushion Vinyl Products Ltd.Foundation Software Associates P. Ltd.Inter Gold (India) Ltd.Enkay Texofood Industries Ltd.Bausch & Lomb India Ltd.Triveni Oilfield Services Ltd.Surya Roshni Ltd.

The Asia IT CenterM:\LIN\ICRLIST.DOC

Bank of Baroda

Mr. G.A. Nayak General Manager (Zonal Office)Mr. V.B. Lal Seksena Assistant General ManagerMr. Arun Tiwari Senior ManagerMr. Hemant K. Parikh Chief Manager (Project Finance)Mr. M.M. Modi Senior ManagerMr. K. Kalidas Manager

Canara Bank

Mr. K.P. Pai General ManagerMr. M.V. Karnath General ManagerMr. A.R. Jayaprakash Senior ManagerMr. C.G. Adwalpalker General ManagerMr. K.P.Y. Rao Deputy General Manager

Steel Authority of India Ltd.

Mr. Arun J. Malhotra Senior Manager(Consultancy Division)

Mr. S.C. Suri Executive Director (Planning)Mr. U.S. Jam Director (Finance)Mr. S.D.M. Nagpal Addl. Director (Finance & Account)Mr. R.K. Garg Senior. Manager (Vice-Chairman

Secretariat)

ANNEX 3

Export Development Project - Ln.3058-IN

Bank of Baroda

Lint of Sub-Loans

Sub-Loan No. Name Amt. Authorized Amt. Disbursed

.S $ US$

A-1.01 HINDUSTAN MAGNETICS LTD. 568,400 0

A-1.02 FABROCRATS 538,093 482,219

A-1.03 HIKAL CHEMICALS 1,080,000 959,675

A-1.04 CIRE OAREBTAKS 821,205 821,205

A-1.05 VIVID CHEMICALS 1,150,000 0

A-1.06 SUBBURAJ COTTON 1,030,000 1,020,404

A-1.07 VJ EQUIPMENTS 884,138 754,532

A-1.08 AMAJIN AGRO EXPORTS 730,000 0

A-1.09 DIGITRON COMPUTERS 1,055,000 0

A-1.10 JYOTI CERAMICS 714,521 714,521

A-1.11 DIMEXON EXPORTS 531,230 516,474

A-1.12 MENON PISTONS LTD. 491,480 492,539

A-1.13 PURITY FLEXIPACK LTD. 574,000 556,380

A-1.14 SARLA GEMS LTD. 580,000 455,428

A-1.15 FLORAM SHOES 822,700 0

A-1.16 PRANAVADITYA SPG 577,440 539,712

A-1.17 VISTA ORGANICS LTD. 420,187 402,127

A-1.18 THIRANI CHEMICALS 539,767 539,767

A-1.19 TRUMAC ENGG 706,682 807,994

A-1.20 BUSH BOAKE ALLEN 895,132 634,990

A-1.21 NUCOR WIRES 1,069,700 0

A-1.22 HANUMAN MINERAL OILS 512,000 508,563

A-1.23 RIVEIRA KNITWEAR P LTD 412,300 486,615

A-1.24 SRI BHARATI COTTON MILLS 520,037 517,426

A-1.25 VISHALDEEP SPG. MILLS 508,100 448,738

A-1.26 EAGLE FLASK (I) LTD. 623,770 658,710

A-1.27 ENGINE COMPONENTS 602,248 675,702

A-1.28 AHMEDNAGAR FORGINGS LTD. 624,400 624,400

A-1.29 PERFECT PROCESSORS 757,900 0

A-1.30 ANKIT GRANITES LTD. 956,025 966,075

A-1.31 ADDISON & CO. LTD. 750,000 593,347

A-1.32 PHARMACIA 803,657 0

A-1.33 IDEAL EXPO FABRICS 1,021,833 1,015,270

A-1.34 LOTUS CHOCALATES LTD. 1,000,000 947,372

A-1.35 MARAL OVERSEAS 1,000,000 944,223

A-1.36 CIMCO SPINNERS 1,000,000 1,032,045

A-1.37 AUROKNIT TEXTILES 942,408 1,042,900

A-1.38 BAXUL CHEMICALS P. LTD. 758,000 0

A-1.39 RAUSH & LAMB 1,000,000 947,570

A-1.40 TUDOR INDIA 1,000,000 0

A-1.41 NARASUS SPINNING 559,070 586,284

A-1.42 SREE RADHAKRISHNA EXPORTS 1,050,000 1,153,097

A-1.43 ENKAY TEXOFOOD 592,000 529,059

A-1.44 CORAMANDAL GARMENTS 920,000 915,977

A-1.45 KRYPTON INDUSTRIES 1,000,000 680,000

A-1.46 JAMNA AUTO INDUSTRIES 925,000 738,425

A-1.47 SARARE AUTOMOULDERS 581,887 221,199

A-1.48 HYT MACHINES P. LTD. 640,000 0

A-1.49 BHARATI TELECOM 500,000 474,876

A-1.50 RAMCO SUPER LEATHERS LTD. 733,960 0

A-1.51 PREMIER POLYTRONIC 1,000,000 1,003,634

A-1.52 SRI NARASIMHA TEXTILES 580,000 802,150

A-1.53 ORO LEATHERS LTD. 751,300 0

A-1.54 TYCHE BIO MEDICA 800,000 689,842

A-1.55 DEWAN RUBBER LTD. 775,200 776,000

A-1.56 INDIA FORGE & DROP 763,157 738,437

A-1.57 GUJARAT POLY AVX 788,000 771,130

A-1.58 WALLMEK IND. LTD. 950,000 950,000

A-1.59 TRINITY DIE FORGERS LTD. 875,000 818,427

A-1.60 SALZER TEXTILES LTD. 1,000,000 1,033,300

B-1.01 C. MAHENDRA EXPORTS 128,000 123,966

B-1.02 TRAVANCORE CHEMICALS 139,776 134,026

B-1.03 CHAM ICE 116,733 116,733

B-1.04 PATODIA SYNTAX 175,000 124,717

B-1.05 NIPPON DEKOR 209,754 209,754

B-1.06 KANTILAL CHOTTALAL 306,000 0

B-1.07 SWISS HEALTH FOODS 547,300 547,000

B-1.08 VISNAGAR TALUK 132,594 132,594

B-1.09 ATLAS AUTO 115,899 115,899

B-1.10 AUSTIN ENGG 309,605 309,606

B-1.11 ANIL COLOUR 115,000 117,536

B-1.12 GEMSTAR & CO. 140,000 168,938

B-1.13 PEMBRIL FLUIDRIVE 215,000 82,004

B-1.14 COLOR CARTONS LTD. 724,700 581,629

B-1.15 TOP EXPORTS 245,000 160,914

B-1.16 FINLANDIA CUTLERY 144,000 80,024

B-1.17 GUJARAT DYESTUFF INDUSTRIES 186,480 186,480

B-1.18 WESTCOAST INDUSTRIES 331,748 290,340

B-1.19 POLYSPIN EXPORT 165,797 165,797

B-1.20 DURAMETALLIC INDIA LTD. 201,375 201,375

B-1.21 JASUBHAI RICHARD SIMON 193,700 193,700

8-1.22 ROKADIA CHEMICALS 96,000 0

B-1.23 NOBEL SYSTEMS 145,609 145,609

B-1.24 ACCORN INDUSTRIES 109,720 0

B-1.25 SUDEEP PHARMA 70,167 70,167

8-1.26 PAPILON EXPORTS 118,198 118,798

B-1.27 EXCELSIOR LEATHER 93,500 41,773

B-1.28 KANNAN TEXTILES LTD 400,000 0

B-1.29 HOLWART ENGG 137,361 131,361

8-1.30 T. ABDUL WAHID AND CO. 335,000 0

8-1.31 AJAY METACHEM 223,000 0

B-1.32 ARIAN TEA INDUSTRIES 46,829 46,829

B-1.33 SHANKAR KUPPLUNGS 356,000 0

B-1.34 KESAR MARBLES & GRANITES 283,000 110,285

B-1.35 CADILLA HOSPITAL 89,774 89,734

B-1.36 KPP KNITS 41,620 41,620

B-1.37 K.PATEL DYECHEM IND. 92,616 92,616

B-1.38 COLOUR CARTONS LTD. 322,200 0

B-1.39 MILTON LTD. 446,000 478,074

B-1.40 CILLULOSE PRODUCTS 232,800 232,800

B-1.41 TOSHINIWAL AGROCHEM 329,600 293,348

B-1.42 JYOTI CERAMIC INDUSTIRES 205,520 0

B-1.43 BRAINWARE SOFTWARE 41,055 0

8-1.44 CREATIVE OUTWEAR 455,000 473,365

B-1.45 S&H GEARS LTD. 104,000 104,000

B-1.46 POWER OHM RESISTORS 102,407 102,407

B-1.47 TECHITRAN POLYLENSES 389,000 389,200

B-1.48 SUNDEK (I) LTD. 358,900 270,793

B-1.49 NOBEL SYSTEMS 49,600 0

B-1.50 STITCHCRAFT 84,000 83,585

B-1.51 PRAGATI ENGG WORKS 196,800 107,184

B-1.52 KIRTLAL KALIDAS 216,000 176,159

B-1.53 ADITYA MAGNETICS 497,380 0

B-1.54 ARVITEX SYNTHETICS LTD. 125,000 0

B-1.55 APPLICON HOLDING 127,000 0

B-1.56 ANAR CHEMICALS 77,600 77,600

B-1.57 INDUS SACHARIDES 224,000 0

B-1.58 NILKAMAL JEWELLERY 400,000 241,025

B-1.59 ROSY JEWELLERY EXPORTS 72,200 70,645

B-1.60 INDUS WOVEN LABELS 408,000 0

B-1.61 INTERGOLD (I) LTD. 350,000 172,900

B-1.62 DUPHAR INTERFRAN 168,000 126,439

B-1.63 MIKRONIX ASSOCIATES 72,000 64,415

B-1.64 SRINIVAS SHOES 168,360 116,513

B-1.65 PILLAIYAR PATTIYAR 342,000 294,860

B-1.66 SUNDARAM ABEX 384,770 42S,402

B-1.67 FOUNDATION SOFTWARE 76,380 74,111

B-1.68 VXL INSTRUMENTS 160,000 153,820

B-1.69 NUBAL INSTRUMENTS 89,000 37,424

B-1.70 JANATICS 80,000 64,438

B-1.71 TRAK LEATHER 38,760 0

B-1.72 SAI LABELS 240,000 240,018

B-1.73 SUPERTEX LABELS 215,510 229,299

B-1.74 HITECH HALOGEN BULBS LTD. 442,707 0

B-1.75 FUTEX STEEL 478,460 498,024

B-1.76 BEAUTIFUL JEWELLERY 350,000 259,086

B-1.77 ADDISON JEWELLERY 10,000 9,488

B-1.78 MOHAN LEATHER 210 0

B-1.79 JAI KAUSHAL PLASTICS 383,000 369,088

B-1.80 GUJAMAT NARMADA KNITWEAR 350,000 335,000

TOTAL 63,702,001 45,491,094

Export Development Project - La.3058-IN

Bank of Baroda

List of EDF Sub-Loans

Sub-Loan No. Nams Amt. Authorized Amt. Disbursed*

USS US$

TA-1.01 Yojana Systems P. Ltd. 76,000 47,045

TA-1.02 Data System Services P. Ltd. 47,500 14,030

TA-1.03 Information Services P. Ltd. 25,500 2,657

TA-1.04 Brainware Software P. Ltd. 27,000 776

TA-1.05 Bharati Telecom 24,770 19,104

TA-1.06 Sun Pharmaceticals 48,520 36,716

TA-1.07 Men at Work 47,700 6,388

TA-1.08 Janatics 44,800 0

TA-1.09 Pragati Eng. works 47,250 23,284

TA-1.10 Flavours & Fragrances 8,000 0

TA-1.11 Yojana Systems P. Ltd. 0 0

TA-1.12 India Forge & Drop Stampings Ltd. 4,000 0

TA-1.13 Marwell Leathers (P) Ltd. (MLPL) 5,000 1,881

TA-1.14 Elcelsior Leather 45,000 18,925

TA-1.15 Arun Exports 33,000 0

TA-1.16 Gupta Chemicals 40,000 27,672

TA-1.17 Comutec Robotics 17,000 7,821

TA-1.18 Holwart Engg. Co. 10,000 0

TA-1.19 Toshniwal Agrochem Ltd. 21,000 8,299

TA-1.20 Isibars Ltd. 42,000 9,343

TA-1.21 Agogranite Inds. Ltd. 50,000 33,970

TA-1.22 Trinity Die Forgers Ltd. 50,000 38,299

TA-1.23 Pacific Granites Ltd. 50,000 0

TA-1.24 Mikrmix Associates 18,000 2,149

TA-1.25 Yojana System Ltd. 0 0

TA-1.26 Micro Plantae Ltd. 40,000 37,851

TA-1.27 Royal Cushion Vinyl Ltd. 46,000 21,731

TA-1.28 Blue Star Ltd. 50,000 1,433

TA-1.29 Vignesh Impex Ltd. 29,600 26,507

TA-1.30 Think Systems P. Ltd. 50,000 13,552

TA-1.31 Ajanta Pharma Ltd. 40,000 0

TA-1.32 Atco Industries Ltd. 50,000 0

TA-1.34 Jyoti Ceramics Ltd. 45,000 40,299

TA-1.35 Gupta Jewel Corp. 36,000 16,060

TA-1.36 Srei Int'l Ltd. 33,000 0

TA-1.37 Acknit Knitting P. Ltd. 16,500 9,522

TA-1.38 Indchem ATL Ltd. 40,000 0

TA-1.39 Pratap Kapur 10,000 7,313

TA-1.40 Man Aluminium 31,000 10,299

TA-1.41 Bindu Synthetics 35,700 6,806

TA-1.42 Pharma Machine Mfg. Co. 15,000 4,179

TA-1.43 Himgiri Industries 32,000 42,119

TA-1.44 Hiralal Printing Works 50,000 0

TA-1.45 Sarare Automoulders Ltd. 27,000 7,493

TA-1.46 K. Patel Chemo Pharma P. Ltd. 10,000 0

TA-1.47 Shiva Medicare Ltd. 33,350 0

TA-1.48 Satnam Overseas Exports 46,000 17,194

TA-1.49 Hind Automount Ltd. 49,000 7,313

TA-1.50 Armour Polymers Ltd. 37,000 0

TA-1.51 Rajastham Spg & Wvg Mills Ltd. 50,000 12,866

TA-1.52 Electronica Exports P. Ltd. 31,500 17,970

TA-1.53 Precision Gears P. Ltd. 50,000 32,955

TA-1.54 Competent Computer Corp. 14,000 12,537

TA-1.55 Proteck Circuits & systems P. Ltd. 50,000 41,791

TA-1.56 Indus Software P. Ltd. 33,000 29,701

TA-1.57 Ajay Metachem P. Ltd. 50,000 27,463

TA-1.58 Haq Brothers 34,000 21,373

TA-1.59 Lanz Laboratories 28,000 0

TA-1.60 Nandadeep Papers 50,000 0

TA-1.61 Globe Metal Industries 33,500 26,179

TA-1.62 Highlands Exports 34,000 31,493

TA-1.63 Rubamin P. Ltd. 32,000 28,358

TA-1.64 C.L. Talwar & Sons 27,500 10,239

TA-1.65 Phoneix Overseas Ltd. 50,000 46,269

TA-1.66 Argus Cosmetics Ltd. 29,000 0

TA-1.67 Multiplex Handicrafts 26,000 15,970

TA-1.68 Rokadia Chemicals Ind. Ltd. 50,000 0

TA-1.69 India Nippon Elect Ltd. 50,000 0

TA-1.70 Rajendra Mech. Ind Ltd. 50,000 9,104

TA-1.71 Holwart Engg Company 20,000 13,134

TA-1.72 Shreyas Intermediates Ltd. 43,350 2,896

TA-1.73 Fair Exports I Pvt. Ltd. S0,000 0

TA-1.74 N.K. Oil Mills Ltd. 50,000 0

TA-1.75 Polymechplast Machines Ltd. 50,000 11,522

TA-1.76 Greengold Exports Pvt. Ltd. 16,000 0

TA-1.77 Stallion Impex Pvt. Ltd. 46,000 36,657

TA-1.78 India Fashions 46,500 43,821

TA-1.79 Punjab Chemicals & Pharm Ltd. 50,000 46,269

TA-1.80 Juthika Exports 50,000 28,925

TA-1.81 Dhoudhary Fashions 50,000 43,881

TA-1.82 Bangalore Knitwear P. Ltd. 15,000 13,433

TA-1.83 Gujarat Narmada Knitwear Ltd. 50,000 32,448

TA-1.S4 West Coast 50,000 43,821

TA-1.85 Solsons 50,000 36,657

TA-1.86 Awim Exim 31,500 0

TA-1.87 Polybond (I) P. Ltd. 50,000 25,881

TA-1.88 Saraf Spg. & Wvg. Mills Ltd. 40,000 0

TA-1.89 Auroknit Exports (I) Ltd. 33,000 0

TA-1.90 Rupal Chemicals Inds. Ltd. 50,000 0

TA-1.91 Axles India Ltd. 50,000 0

TA-1.92 Vijay Wires & Fil. Ltd. 40,500 21,791

TA-1.93 Paper Products Ltd. 50,000 42,209

TA-1.94 Anil Steel and Inds. Ltd. 36,500 9,463

TOTAL 3,425,040 1,385,104

* Exchange rate USS1 * Rs. 33.5


Canara Bank

List of Sub-Loane

Sub-loan No. mane Ant. Authorized Ant. Diabursed

US$ US$

A-2.01 Nova Blectromagnetics Ltd. 1,198,752 592,272

A-2.02 Indocount Industries Ltd. 1,182,000 726,874

A-2.03 Bhiwani Denims & Apparels Ltd. 736,875 571,630

A-2.04 Wellknit Apparells (P) Ltd. 540,540 414,496

A-2.05 Tichtron Polylens Ltd. 500,000 500,000

A-2.06 Maral Overseas Ltd. 1,000,000 902,684

A-2.07 Perfect Spinners Ltd. 1,000,000 697,675

A-2.08 Flex Foods Ltd. 880,000 868,123

A 2.09 Lotus Chocolates 1,000,000 0

A-2.09 Kesar Marbles & Granites Ltd. 505,521 505,521

A-2.11 Ct Cotton Yarn Ltd. 1,000,000 1,000,000

A-2.12 Tudor India Ltd. 1,000,000 849,082

A-2.13 Indo American Hybrid Seeds Ltd. 584,847 171,803

A-2.14 Namasthe Leather Garments Ltd. 1,000,000 1,000,000

A-2.15 Jamna Auto Industries Ltd. 1,000,000 1,000,000

A-2.16 Ankit Granites Ltd. 590,000 586,588

A-2.17 TTK Biomed Ltd. 668,000 559,252

A-2.18 Mid (East) India Ltd. 1,000,000 0

A-2.19 Windsome Yarns Ltd. 1,000,000 1,000,000

A-2.20 Nucor Wires (India) Ltd. 746,155 0

A-2.21 Shenoy Granites 775,000 702,456

A-2.22 Tien Yuan India Ltd. 540,000 535,475

B-2.01 Divya Jewellers Pvt. Ltd. 55,000 46,575

B-2.02 Tufex Leather & Allied Ind. Pvt. Ltd. 317,000 262,797

B-2.03 Amigo Exports 120,175 0

B-2.04 Siba Software P. Ltd. 55,000 50,795

B-2.05 Bounnarraj & Co. 58,000 12,678

B-2.06 Intron LTd. 211,500 174,817

B-2.07 Pegaso. Inhouse Manufacturing Unit 73,000 0

B-2.08 Agarwal Dresses 80,960 52,387

B-2.09 J R S Exports 54,650 44,696

B-2.10 Classic Rugs 480,000 331,982

B-2.11 Gomukhi Charma Kendra 44,200 44,200

B-2.12 Sapri Garments Pvt. Ltd. 64,700 58,172

B-2.13 Bharat & Co. 73,050 0

8-2.14 Jain Marble 342,050 0

B-2.15 Infosys Consultants 148,546 56,027

B-2.16 Dattareya Textiles 255,025 210,155

B-2.17 Lirf Mills LTd. 292,600 259,370

B-2.18 Forward Leather Co. 95,500 80,132

B-2.19 Intermode International 83,592 71,724

B-2.20 Gaja Shoes 69,000 51,219

B-2.21 Terry Knits 474,800 401,395

B-2.22 Siba Software 172,875 76,354

B-2.23 Icicon Electronics Ltd. 367,081 352,748

B-2.24 Shivalika Int'l 388,250 313,826

B-2.25 Veriforne Software Systems 250,000 250,000

B-2.26 Kundan Rice & Oil Mills 345,860 261,482

B-2.27 Precision Equipments 150,000 0

B-2.28 Sensortronics (I) Ltd. 334,000 334,000

8-2.29 KRM Int'l 244,210 244,210

B-2.30 Premier Leather 68,000 0

B-2.31 Lexpo Int'l 76,235 76,235

B-2.32 Neha Exports 113,903 85,697

B-2.33 Coromantal Leather P. Ltd. 522,490 522,490

B-2.34 Texport Int'l 60,000 60,000

B-2.35 R. Tulastidas Exports P. Ltd. 116,000 94,986

B-2.36 Srinivas SHoes P. Ltd. 115,000 0

B-2.37 R.T. Agro P. Ltd. 115,000 85,000

B-2.38 Lynx Optics Ltd. 395,000 342,332

B-2.39 Prema Fashions 149,254 103,261

B-2.40 Kadi Garments 115,256 79,629

B-2.41 Senior Garments 55,149 0

B-2.42 Rohini Garments 68,487 60,987

B-2.43 Swami Screen Printers 75,099 62,717

B-2.44 Maini Precision Products 87,341 87,341

B-2.45 .Autolec Industries Ltd. 74,269 64,769

B-2.46 Renewable Energy Systems P. Ltd. 90,609 89,490

B-2.47 Makers & Sellers Union 86,379 72,971

B-2.48 Iver Hosiery 70,767 70,767

B-2.49 Kewal Ramani Exports Ltd. 140,634 140,634

B-2.50 Nycil Knitware 88,607 88,607

B-2.51 Flat Products Equipments I Ltd. 347,000 347,000

B-2.52 Disco Stone INdo P. Ltd. 388,000 388,000

B-2.53 Sarup Tanneries 456,230 0

B-2.54 Apparel & Leather Technics P. Ltd. 116,488 0

B-2.55 Latmipriya Global Garments S7,607 54,957

B-2.56 8.P. Export Corporation 48,130 46,126

B-2.57 Akbar Knitting Co. 201,640 190,240

B-2.58 B. Arunkiumar Int'L Ltd. 172,600 129,308

B-2.59 Aries Apparels P. Ltd. 119,115 0

B-2.60 Greeting Knitware 52,010 52,010

B-2.61 Alps Innovators P. Ltd. 67,000 0

B-2.62 Toy-N-Toy Int'l 327,706 327,706

B-2.62 Abhimanyu Garments 78,000 78,000

3-2.63 Knkal Exports 125,000 125,000

B-2.64 Aristo Int'l 74,500 70,508

B-2.65 Yescee Knitware 176,500 16,389

B-2.66 Swamy & Co. 144,000 144,000

B-2.67 Senthil Mills 142,500 142,500

B-2.68 Chandra Trading Corporation 133,500 133,500

B-2.69 Radha Textiles 160,000 160,000

B-2.70 ARthur Knitting 183,000 183,000

B-2.71 Spectrum Embrodiary 88,000 85,265

B-2.72 Dustkar Apparels 110,000 110,000

B-2.73 Pearl Shoes 50,000 50,000

B-2.74 Indian Connections 5,000 5,000

B-2.75 Asma Export 13,000 13,000

TOTAL 30,667,319 22,265,094


Canara Bank


Sub-Loan No. Name Ant. Authorized Amt. Disbursed

US$ us$

TA-2.01 Liberty Exports Ltd. 0 0

TA-2.02 Mathur & Co. 20,280 8,606.00

TA-2.03 Ashwini Engineering Industries 1,594 1,511

TA-2.04 Kumar Metal Industries 26,500 25,767

TA-2.05 Duroflex Coir Industries 17,750 14,306

TA-2.06 Forward Leather Company 4,000 4,000

TA-2.07 Weikfield International 50,000 16,444

TA-2.08 Unique Valves Private Ltd. 0 0

TA-2.09 Classic Diamonds India Ltd. 0 0

TA-2.10 Next Fashion Creators 0 0

TA-2.11 Precision Rubber Industries 48,000 48,000

TA-2.12 New Tech Industries 0 0

TA-2.13 Ferrous Forgings Pvt. Ltd. 27,312 15,752

TA-2.14 Shantivijay Jewels P. Ltd. 22,650 22,529

TA-2.15 Laura Leathers 10,769 3,290

TA-2.16 Eros Pharma P. Ltd. 19,173 10,452

TA-2.17 Govind Rubber Ltd. 32,269 22,732

TA-2.18 Shoes East 30,700 12,385

TA-2.19 Meco Instruments Pvt. Ltd. 36,420 36,420

TA-2.20 Kemtrode Pvt. Ltd. 38,465 13,999

TA-2.21 Blechem (Inter. Div.) 47,520 28,247

TA-2.22 Shahibabad Impex Pvt. Ltd. 0 0

TA-2.23 Scruples (I) Pvt. Ltd. 29,581 614

TA-2.24 Gujarat Vacuum Coaters (P) Ltd. 29,401 1,495

TA-2.25 Sarju Int'l P. Ltd. 24,547 24,546

TA-2.26 Riba Textiles P. Ltd. 44,712 29,312

TA-2.27 Golden Peakock Overseas P. Ltd. 32,279 32,279

TA-2.28 Proseal Closures Pvt. Ltd. 23,589 26,725

TA-2.29 Siba Software Pvt. Ltd. 12,696 6,300

TA-2.30 Young Style Hosieries 2,058 2,058

TA-2.31 Everknit Hosiery Mill 10,795 4,576

TA-2.32 Siyaram Silk Mill 28,590 28,589

TA-2.33 Regent Chemicals 0 0

TA-2.34 Alpha Flock 0 0

TA-2.35 Raj Impex Ltd. 15,155 15,153

TA-2.36 Enginemates Heat Transfer P. Ltd. 0 0

TA-2.37 Treviso Exim (India) 0 0

TA-2.38 TamilnaduDrugs & Pharmaecuticals 13,295 0

TA-2.39 Incowax Pvt. Ltd. 10,880 10,867

TA-2.40 Autolec Industries Ltd. 15,123 15,114

TA-2.41 Rohini Garments 8,960 8,960

TA-2.42 Voage Exports 0 0

TA-2.43 Refox Engg. (I) Ltd. 12,139 2,160

TA-2.44 Nirmachal Engg. P. Ltd. 14,720 9,751

TA-2.4S Pace Elcot Automation Ltd. 25,209 9,672

TA-2.46 Pratibha Processors P. Ltd. 14,978 7,309

TA-2.47 Mercury Software Services P. Ltd. 6,580 0

TA-2.48 Sapri Garments P. Ltd. 8,720 8,713

TA-2.49 Bharat Trading Corp. 11,742 10,585

TA-2.50 Suria Images 13,200 3,516

TA-2.51 Elforge Ltd 19,133 19,118

TA-2.52 Akar Tools P. Ltd. 25,854 25,848

TA-2.53 Mercury Leather Pvt. Ltd. 30,434 8,520

TA-2.54 Nuchem Engg. Ltd. 43,936 35,832

TA-2.55 Raperi Engg. Ltd. 40,270 35,998

TA-2.56 Subadra Exports 15,480 0

TA-2.57 Stylewerk Clothing Pvt. Ltd. 18,885 18,010

TA-2.58 Mathur & Co. 48,960 48,960

TA-2.59 Vinayaka Synthetics Ltd. 33,617 3,683

TA-2.60 Pferd Tools Pvt. Ltd. 35,525 29,914

TA-2.61 Nandan Exports 6,308 2,969

TA-2.62 Ampersand Software Applications 49,238 49,237

TA-2.63 Wiltech 49,720 34,556

TA-2.64 Vivy Fashions 5,000 1,546

TA-2.65 Concept Pharmaceuticals Ltd. 15,551 6,036

TA-2.66 Mukund Chemicals P Ltd. 39,250 1,694

TA-2.67 Ramjidas Chemicals P Ltd. 49,167 5,147

TA-2.68 Bangalore Commercial Corpn. 28,125 28,123

TA-2.69 S.B. & T Gems and Jewellery Exports Pvt. 25,545 17,604

TA-2.70 Salora International Ltd. 29,787 18,681

TA-2.71 Rare Wear Enterprises 5,890 5,890

TA-2.72 Shivalika International 32,500 0

TA-2.73 M K Impex Corporation 26,434 26,434

TA-2.74 TTK Bio-Med Ltd. 46,813 0

TA-2.75 Y S Syntex Projects 35,692 11,476

TA-2.76 Ultra Dry Tech Engg P. Ltd. 32,667 25,501

TA-2.77 Sarju Casual Wear P. Ltd. 29,725 29,701

TA-2.78 Indication Instruments 26,650 17,608

TA-2.79 Gokuldas Images 13,350 0

TA-2.80 Exotica Exports 33,069 33,068

TA-2.81 Golden Threads P. Ltd. 38,026 0

TA-2.82 Century Twenty One Exports 19,730 6,557

TA-2.83 Electro Carbonium P. Ltd. 5,426 5,200

TA-2.84 Warsaw International 9,300 9,300

TA-2.85 Liberty Exports 11,062 6,694

TA-2.86 Unicorn Agro Tech Ltd. 13,506 11,791

TA-2.87 Doorvani Cables P. Ltd. 49,484 20,736

TA-2.88 ABC Fashions 35,970 34,736

TA-2.89 Rewadale Precision Tools 46,079 46,071

TA-2.90 Omni Exports 47,106 0

TA-2.91 Acumac Machine Tools P. Ltd. 50,000 39,821

TA-2.92 Odyssey Information Technologies P. Ltd. 34,847 3,954

TA-2.93 Cosmo Films Ltd. 26,207 4,781

TA-2.94 Astra Microwave Prducts Ltd. 29,007 19,519

TA-2.95 Samuthralakshmi Textiles 25,283 25,283

TA-2.96 Auto Ignition Pvt. Ltd. 28,435 4,393

TA-2.97 Sudhir Sheth 18,705 9,685

TA-2.98 Sarita Handa Exports 23,866 13,019

TA-2.99 Gyan Silk Traders 35,409 35,409

TA-3.00 Gold King Exports 21,452 10,693

TA-3.01 Asis Apparels 20,986 6,310

TA-3.02 Duroflex Coil Industries 19,745 19,727

TA-3.03 Vishnu Exports International 12,243 4,888

TA-3.04 Indo Count Industries Ltd. 46,389 19,102

TA-3.05 Vlkram Overseas Pvt. Ltd. 10,972 0

TA-3.06 Riba Marketing Pvt. Ltd. 26,857 20,633

TA-3.07 Triage Overseas 30,027 30,025

TA-3.08 VST Tillers Tractors Ltd. 49,075 49,075

TA-3.09 SRG Systems Pvt. Ltd. 27,630 27,588

TA-3.10 Brothers Granites (I) Ltd. 36,708 7,224

TA-3.11 United Catalyst India Ltd. 44,641 0

TA-3.12 Unchem Engineering Ltd. 23,097 11,413

TA-3.13 Pearl Insulations P. Ltd. 41,332 32,214

TA-3.14 K R M International Ltd. 28,918 13,768

TA-3.15 Ficom Organics Ltd. 45,567 0

TA-3.16 Processware Systems P. Ltd. 12,575 12,510

TA-3.17 -Bemco Jacks & Allied Products 11,787 0

TA-3.18 Orient International 12,696 12,364

TA-3.19 Commo Ferrites LTd. 28,492 10,526

TA-3.20 Kirloskar Computer Services Ltd. 25,800 25,798

TA-3.21 Overseas Exports 25,238 0

TA-3.22 Garware Plastics & Polyester Ltd. 28,225 0

TA-3.23 Pharm Products Pvt. Ltd. 42,987 42,987

TA-3.24 Temptation Foods Ltd. 41,233 40,275

TA-3.25 International Instruments Ltd. 28,298 16,498

T&-3.26 Continental Engines Ltd. 3S,142 0

SOTAL 3,064,086 1,794,455


EXIM Bank

List of Sub-Loans

Sub-Loan No. Nang Ant. Authorized Ant. Disbursed

USS US$

A-3.01 Needle Industries India Ltd. 415,000 379,103

A-3.02 Citicorp Overseas Software Ltd. 640,000 770,353

A-3.03 Hitkari Potteries Ltd. 510,000 497,844

A-3.04 Ponds India Ltd. 852,000 524,031

A-3.05 Nochem Engineering 440,000 0

A-3.06 Brakes India Ltd. 925,000 826,826

A-3.07 Gomathi Mills 1,000,000 1,033,428

A-3.08 Lumax 640,000 543,119

A-3.10 Transpek Industry Ltd. 1,000,000 814,269

A-3.11 Tube Investment of India Ltd. 1,000,000 773,787

A-3.12 Bawa Skin Co. 895,800 708,422

A-3.13 Ramco Super Leather 0 0

A-3.14 Dabur India 576,000 484,966

A-3.15 Widia Ltd. 1,000,000 863,214

A-3.16 India Ports Ltd. 808,000 771,340

A-3.17 SWIL Ltd. 0 0

A-3.18 Eicher 763,077 724,617

A-3.19 L.G. Balakrishnan 923,077 810,811

A-3.20 Arvind Mills Ltd. 966,000 984,116

A-3.21 Motor Industries Ltd. 1,000,000 1,035,912

A-3.22 Kirlskar Cummins Ltd. 970,667 940,265

A-3.23 Best Built Leather 663,334 680,109

A-3.24 Jain Irrigation System Ltd. 1,000,000 1,035,912

A-3.25 Titan Watches 1,000,000 1,035,912

A-3.26 Fidyut Metallics 944,000 910,553

A-3.27 Sundaram Fasteners 1,000,000 979,432

A-3.28 Yokogawa Bluestar 640,000 677,736

A-3.29 Amalgam Foods 934,000 930,233

A-3.30 MRF Ltd. 1,000,000 955,718

B-3.01 Reed Relays Ltd. 200,000 0

B-3.02 Thermax Ltd. 397,142 205,469

B-3.03 Akg Acoustics 147,555 108,541

B-3.04 Tanjavar Textiles 245,100 0

B-3.05 Super Tannery 360,000 280,483

B-3.06 Autolite 360,000 244,316

B-3.07 Index Computing 428,600 263,350

B-3.08 PMP Auto Industries Ltd. 416,000 292649

B-3.09 Wipro Information Tech. Ltd. 150,000 131,215

B-3.10 Himatsingke Seide Ltd. 413,000 440,539

B-3.11 Florind Shoes 161,538 143,785

B-3.12 Ramco Super Leather 488,461 518,579

B-3.13 Zandu Pharmaceutical Works 331,000 285,193

B-3.14 T.I. Diamond Chains Ltd. 369,230 328,205

B-3.15 Apeego Corporation 369.235 331,492

B-3.16 Tanjavur Textiles Ltd. (change A-3.09 24S,100 190,315

B-3.17 India forge & Drop Stampings Ltd. 346,154 310,773

B-3.18 EXCEL Industries Ltd. 200,000 198,757

B-3.19 Index Computing Pvt. Ltd. 342,880 376,006

B-3.20 Tubo Energy Ltd. 200,000 207,182

TOTAL 28,676,950 25,548,877


HXIM Bank


Sub-Loan No. Name Ant. Authorized Amt. Disbursed

us$ 088

TA-3.01 Azndu Pharmeceutical Works Ltd. 27,855 28,007

TA-3.02 Thermax Ltd. 68,600 41,465

TA-3.03 Kadri Mills Ltd 58,900 50,527

TA-3.04 Jan Irrigation Systems Ltd. 72,715 36,347

TA-3.05 Lumax 68,665 68,549

Ta-3.06 Dabu India Ltd. 96,000 61,632

TA-3.07 Fykays Engineering P. Ltd. 21,870 0

TA-3.08 Lectrotek Systems 30,726 13,862

TA-3.09 Indfrag Pvt. Ltd. 15,810 11,735

TA-3.10 Balsara Hygiene Products 41,295 28,446

TA-3.11 RSI India PRivate Ltd. 72,560 16,984

TA-3.12 Transpok Industries Ltd. 55,825 46,121

TA-3.13 PMP Auto Industries Ltd. 7,500 7,869

TA-3.14 SWIL Ltd. 57,776 37,035

TA-3.15 Mysore Kirloskar Ltd. 120,000 106,353

TA-3.16 Needle Industries India Ltd. 100,000 90.245

TA-3.17 Dabur India Ltd 105,500 0

TA-3.18 Zandu Pharmeceutical Works 220,600 222,570

TA-3.19 Modern Malleable Casting 59,776 39,319

TA-3.20 Kinetic Engineering 87,490 79,115

TA-3.21 Aqua Bearings Ltd. 35,019 36,286

TA-3.22 Chendur Forgings 24,000 16,238

TA-3.23 Su-Raj Diamonds India Ltd. 98,400 86,358

TA-3.24 Surat Diamonds Industries Ltd 31,240 3,099

TA-3.25 Sanarpan Fabricators Ltd. 59,180 48,628

TA-3.26 Atlas Cycle Ind. 49,486 43,944

TA-3.27 L.G. Balakrishnan & Bros Ltd. 72,500 61,674

TA-3.28 Revathicp Equipment Ltd. 41,000 35,300

TA-3.29 Indian Aluminium Co. Ltd. 57,731 30,866

TA-3.30 SSB Industries Ltd. 32,000 26,155

TA-3.31 EXCEL Industries Ltd. 93,350 79,708

TA-3.32 Pond's India Ltd. (Mushroom Div.) 55,000 45,608

TA-3.33 Motor Industries Ltd. 52,000 38,494

TA-3.34 Pond's India Ltd.(Thermometer Div.) 100,000 83,356

TA-3.35 India Seamless Metal Tubes Ltd. 53,980 13,992

TA-3.36 Arvind Mills Ltd. 62,800 22,903

TA-3.37 Taarika Exports 95,380 97,658

TA-3.38 Timeless Toys 17,500 6,963

TA-3.39 English Electric Co. of India Ltd. 25,000 24,812

TA-3.40 Ion Exchange (India) Ltd. 90,765 51,546

TA-3.41 T.I. Diamon Chain Ltd. 100,000 98,921

TA-3.42 OM Health Care Products 17,900 14,742

TA-3.43 T & L Gould Ltd. 30,833 0TA-3.44 Hindustan Gas & Ind. Ltd. 89,763 70,164

TA-3.45 Suri Computers Pvt. Ltd. 35,000 4,877

TA-3.46 Tital Watches Ltd. 70,000 66,978

TA-3.47 Tube Investment of India Ltd. 200,000 195,950

TA-3.48 Shalaka Electronics Pvt. Ltd. 49,971 44,455

TA-3.49 India Forge & Drop Stampings Ltd. 50,000 47,737

TA-3.50 India Chain Pvt. Ltd. 28,834 16,811

TA-3.51 Business Forms Ltd. 50,959 47,977

TA-3.52 Biocon India P. Ltd. 83,340 68,781

TA-3.53 Koluthara Exports Ltd. 51,625 34,797

TA-3.54 Fusegera Electric Ltd. 50,000 0TA-3.55 ITC Bhadrachalam Paperboards Ltd. 100,000 54,447

TA-3.56 REPL Engineering (India) Ltd. 99,667 80,753

TA-3.57 Fouress Engineering (India) Ltd. 41,400 34,951

TA-3.58 Manugraph Industries Ltd. 99,300 81,153TA-3.59 Kirloskar Electric Ltd. 95,716 83,215

TA-3.60 Madras Engineerings Industries Ltd. 31,115 14,166

TA-3.61 RS Software India Ltd. 54,417 0TA-3.62 Mairs Pharma (India) Ltd. 7,500 4,546TA-3.63 Nath Bros Exim International Ltd. 28,530 16,677

TA-3.64 Yokogawa Keonics Ltd. 30,000 26,157

TA-3.65 Elgi Equipments Ltd. 100,000 91,020

TA-3.66 Business Universal Incorporated 84,000 66,883

TA-3.67 Accurate Products Corp. 12,000 11,311

TA-3.68 )L0-GWB Cardan Shafts Ltd. 35,000 22,545

TA-3.69 The Sheveroy Estates Ltd. 100,000 49,765

TA-3.70 Intech Systems Pvt. Ltd. 79,350 0TA-3.71 Himmatsingka Seide Ltd. 100,000 91,277TA-3.72 Madras Motor Ltd. 75,000 81,153

TA-3.73 GEC of India Ltd. 54,017 0TA-3.74 Rico Auto Industries Ltd. 51,695 36,893TA-3.75 ABS Industries Ltd. 68,325 34,703TA-3.76 Ramco Super Leathers Ltd. 47,500 44,797TA-3.77 Shasun Chemicals (Madras) Ltd. 90,000 60,650TA-3.78 Super Auto Forge (P) Ltd. 26,000 14,167TA-3.79 Index Computing (P) Ltd. 82,500 43,638TA-3.80 O/I/N Connectors Ltd. 58,250 45,289

TA-3.81 Hindustan Gas & Industries Ltd. 51,267 47,017TA-3.82 Shyam Ahuja Ltd. 98,800 97,618TA-3.83 Gangadharam Appliances Ltd. 100,000 56,436TA-3.84 Ramesh Flowers Pvt. Ltd. 42,500 40,899TA-3.85 Vikrant Auto Susponsions 22,833 22,268TA-3.86 Concert Spices & Exports Ltd. 38,700 33,648TA-3.87 Dyna Mechanical and Engg. Co.P.Ltd. 67,900 46,290

TA-3.88 Roots Industries Pvt. Ltd. 55,000 52,553TA-3.89 International Informatics Solutions 73,945 19,116TA-3.90 Hindustan Electro Graphites Ltd. 53,335 23,990TA-3.91 Auto Pins (India) Ltd. 40,125 37,907

TA-3.92 Lamina Suspension Products Ltd. 55,000 51,758

TA-3.93 Atlas Cycle Industries Ltd. 44,500 30,314

TA-3.94 Grasim Industries Ltd. 68,400 24,514

TA-3.95 Parishudh Sadhan Yantra Ltd. 73,820 34,005

TA-3.96 PMT Machine Tool Automatics Ltd. 99,700 64,852

TA-3.97 OMC Computer Ltd. 72,666 4,792

TA-3.98 Jay Shree Textiles 75,520 66,233

TA-3.99 Carborundvm Universal Ltd. 58,865 29,439

TA-4.00 TTK Pharma Ltd. 80,000 39,761

TA-4.01 Balsara Hygiene Products Ltd. 35,985 37,144

TA-4.02 Echjay Forgings Ltd. 60,000 45,674

TA-4.03 Sri Sarbati Steels Ltd 50,000 46,292

TA-4.04 Flgi Polytex Ltd. 21,000 0

TA-4.05 Chloride Industries Ltd. 98,814 93,718

TA-4.06 Technocraft Industries (India) Ltd. 26,700 22,211

TA-4.07 Inca Hammock Mfg. & Exp. Ltd. 20,000 16,099

TA-4.08 Kalyani Agro Corpn. P. Ltd. 98,842 58,854

TA-4.09 Pyramid Business Systems (P) Ltd. 15,000 12,950

TA-4.10 Usha Martin Industries Ltd. 44,708 23,320

TA-4.11 Sulakshana Circuits Ltd. 34,500 26,350

TA-4.12 Kabsons Gas Equipment (P) Ltd. 30,000 0

TA-4.13 Unique Pharmeceutical Laboratories 53,340 4,459

TA-4.14 W.S. Industries (India) Ltd. 1,419 0

TA-4.15 P.S. Electricals Pvt. Ltd. 2,179 0

TA-4.16 Unicorn Biotek Ltd. 10,440 0

TA-4.17 Nirmanchal Engineer Pvt. Ltd. 4,799 0

TA-4.18 Premier Instruments and Controls Lt. 4,557 0

TA-4.19 Devendra Exports Pvt. Ltd. 4,373 0

TA-4.20 Best & Crompton Engineering Ltd. 1,587 0

TA-4.21 T T Ltd. 90,650 0

TA-4.22 L G Balakrishnan & Bros. Ltd. 4,127 0

TA-4.23 Wideia (India) Ltd. 7,513 0

TA-4.24 Autolec Industries Ltd. 5,978 0

TA-4.25 Zchjay Forgings Ltd. 7,558 0

TA-4.26 Sundaram Clayton Ltd. 9,424 0

TA-4.27 St-elcast Ltd. 4,185 0

TA-4.28 Compro Services (India) Pvt. Ltd. 3,723 0

TA-4.29 Dewas Tools Pvt. Ltd. 7,949 0

TA-4.30 Mascot Tools & Forgings Pvt. Ltd. 2,473 0

TA-4.31 Ceekey Daikin Ltd. 1,755 0

TA-4.32 Eicher Goodearth Ltd. 59,589 0

TA-4.33 Precision Transmatic Devices Pvt.L 1,592 0

TA-4.34 Suri Computers Pvt. Ltd. 3,757 0

TA-4.35 Mekins Agro Products Pvt. Ltd. 1,059 0

TA-4.36 Future Software Pvt. Ltd. 1,910 0

TA-4.37 Vibromech Engineers Pvt. Ltd. 407 0

TA-4.38 The Indian Seemless Metal Tubes Ltd 2,698 0

TA-4.39 Chowgule Matrix Hobs Ltd. 5,668 0

TA-4.40 Bharat Forge Ltd. 68,852 0

TA-4.41 Wadco Tools Ltd. 4,847 0

TA-4.42 DCM Data Products Ltd. 12,727 0

TA-4.43 Indchem Electronics Ltd. 2,110 0

TA-4.44 Audco India Ltd. 33,689 0

TA-4.45 Khimline Pumps Ltd. 1,390 0

TA-4.46 Jamna Auto Industries Ltd. 7,204 0

TA-4.47 Clutch Auto Ltd. 8,228 0

TA-4.48 Kipha Exports (P) Ltd. 10,251 0

TA-4.49 Usha Martin Industries Ltd. 4,352 0

TA-4.50 Technofour 5,153 0

TA-4.51 Indo-Schottle Auto Parts Pvt. Ltd. 2,940 0

TA-4.52 P S Power Controls 6,169 0

TA-4.53 Gremach Cnc Ltd. 4,857 0

TA-4.54 Lamina Suspension Products Pvt. Ltd. 7,937 0

TA-4.55 Crompton Greaves Ltd. 54,563 0

TA-4.56 India Pistons Ltd. 1,581 0

TA-4.57 Cortica Manufacturing Co. 2,347 0

TA-4.58 Murugappa Morganite Ceramic Fibres 6,902 0

TA-4.59 Permanent Magnets Ltd. 11,222 0

TA-4.60 East India Hotels Ltd. 600 0

TA-4.61 Wipro Infotech Ltd. 35,361 0

TA-4.62 Jamna Auto Industries Ltd. 68,964 0

TA-4.63 Eicher Goodearth Ltd. 50,000 42,641

TA-4.64 Jaya Shree Insulators 66,010 64,624

TA-4.65 Cutch Auto Ltd. 62,166 57,926

TA-4.66 IFB Industries Ltd. 82,769 38,959

TA-4.67 Hical Magnetic (P) Ltd. 18,900 17,219

TA-4.68 Bharat Industries 26,000 16,337

TA-4.69 Neptune Equipments (P) Ltd. 76,788 0

TA-4.70 Normak Fashions (P) Ltd. 30,000 11,986

TA-4.71 Covema Filaments Ltd. 25,633 20,978

TA-4.72 New Tech Services (P) Ltd. 37,167 0

TA-4.73 Data Software Research Co. Ltd. 70,250 40,479

TA-4.74 Sumitra Pharmaceuticals & Chemical 97,465 S,959

TA-4.75 Mideast (India) Ltd. 72,300 3,912

TA-4.76 Wockhardt Ltd. 99,613 95,171

TA-4.77 Multimetals Ltd. 32,250 47,500

TA-4.78 Techtran Polyenses Ltd. 37,200 36,144

TA-4.79 Vikrant Tyres Ltd. 79,900 57,523

TA-4.80 Priya Chemicals 17,500 0

TA-4.81 Tata BP Solar (India) Ltd. 55,400 0

TA-4.82 Bombay Burmah Trading Corp. Ltd. 40,000 0

TA-4.83 The Gomathy Mills 25,000 0

TOTAL 8,692,997 5,372,699


The Industrial Credit mnd Investment Croporation of India Ltd.

List of Sub-Loans

Sub-loan No. Name Amt. Authorized Amt. Disbursed

U1$ US$

A-1.01 TISCO 11,290,346 592,272

8-1.01 Somany Pilkington 642,000 642,000

B-1.02 Kamla Ceramic Tiles 0 0

B-1.03 Classic Rugs 305,000 269,000

B-1.04 Indo Matsushita App. 433,000 433,000

B-1.05 Modern Woollen 2,240,000 2,228,000

B-1.06 Fag Precision 276,000 236,000

B-1.07 Shah & Mahajan 232,000 232,000

B-1.08 Al-Kabeer Exp-Fuji 1,734,000 1,734,000

B-1.09 J.K. Chemicals 662,000 662,000

B-1.10 Bombay Dyeing 712,000 712,000

B-1.11 Coventry Cil-O-Mat 783,000 783,000

B-1.12 Nijjer Agro Food 519,000 519,000

B-1.13 Bombay Dyeing 1,602,000 1,602,000

B-1.14 BPL sanyoutil 3,038,000 3,038,000

B-1.15 J.K. Industries 4,511,000 4,511,000

B-1.16 Motor Indust. 2,172,000 2,172,000

B-1.17 Eagle Flask Cancelled 0

B-1.18 0 E N Connectors Cancelled 0

B-1.19 Datamatics Cancelled 0

B-1.20 Chevro Leather 535,000 395,000

B-1.21 Riba Textiles 364,000 364,000

B-1.22 Somany Pilkington 274,000 236,000

B-1.23 Mukund Limited 414,000 414,000

B-1.24 BPL Sanyo II 327,000 327,000

B-1.25 Dhunseri Tea 721,000 613,000

B-1.26 Ind. Aluminium 213,000 213,000

B-1.27 Bojaraj Textiles 250,000 245,000

B-1.28 R.B. Rodda 107,000 107,000

B-1.29 Tri-Marine Foods 211,000 211,000

B-1.30 Heaven Diamonds Cancelled 0

B-1.31 L.T. Karle & Co. 60,000 58,000

B-1.32 Sri Ramakrishna Mill 308,000 308,000

B-1.33 MRF Ltd. 1,411,000 1,106,000

B-1.34 Ayyappan Textiles 171,000 188,000

B-1.35 Salem Textiles 312,000 312,000

B-1.36 Sundaram Fastners 496,000 496,000

B-1.37 Sree Ayyanar Spg. 484,000 484,000

B-1.38 Eastern Spg. Mills 377,000 377,000

B-1.39 Shankar Produce 21,000 21,000

B-1.40 TISCO 2,932,000 2,932,000

B-1.41 Gajra Gears 450,000 24,000

B-1.42 Stencil Apparels 739,000 648,000

B-1.43 Mafatlal Fine 487,000 487,000

B-1.44 Taurus Leather 61,000 61,000

B-1.45 Lotus Chocolate 806,000 782,000

B-1.46 TISCO IV 7,844,000 4,387,000

B-1.47 Tractor & Farm Equip. 590,000 590,000

B-1.48 Secals Limited 85,000 85,000

B-1.49 Ashok Leyland 2,195,000 1,120,000

B-1.50 Perfect Circle 269,000 269,000

B-1.51 Kinetic Engineering 859,000 859,000

B-1.52 Brakes India 775,000 393,000

B-1.53 GTN Textiles 524,000 524,000

B-1.54 Sree Meenakshi Mills Cancelled 0

B-1.55 Asher Textiles 346,000 245,000

B-1.56 Godrej & Boyce 1,213,000 1,012,000

B-1.57 SKF Bearings 2,043,000 2,043,000

B-1.58 Mahindra & Mahindra 3,666,000 3,666,000

B-1.59 Waczech Leather 152,000 0

B-1.60 Tata Tea 467,000 467,000

B-1.61 Soni Leathers 44,000 44,000

B-1.62 Guj spinners 207,000 0

3-1.63 Ax-vind Mills 3,970,000 0

B-1.64 Higashimaru Feeds 73,000 82,000

B-1.65 Armour chemicals 172,000 169,000

B-1.66 Thambi Modern 94,000 87,000

B-1.67 Sree Vadivambigai 229,000 29,000

B-1.68 India Foils 2,312,000 2,177,000

B-1.69 Madura Coats 222,000 222,000

B-1.70 Suryalakshmi Cotton Cancelled 0

B-1.71 Tube Investments 234,000 234,000

B-1.72 TISCO III 2,157,000 1,734,000

B-1.73 Maneklal Harilal 259,000 259,000

B-1.74 Foremost Ceramics 502,000 502,000

B-1.75 Forbes Forbes Cancelled 0

B-1.76 Addison & Co. 53,000 53,000

B-1.77 widia India 230,000 227,000

B-1.78 Special Steels 219,000 80,000

B-1.79 Ranbaxy Labs 98,000 0

B-1.80 Vardhman Spg. Cancelled 0

B-1.81 Salem Textiles Cancelled 0

B-1.82 Gabriel India 1,463,000 878,000

B-1.83 Shin-a-Chemicals Cancelled 0

B-1.84 E. Merck India Cancelled 0

B-1.85 Goradia Forge Cancelled 0

B-1.86 Spic Fine Chem. 439,000 0

B-1.87 Accra pac 18,000 18,000

B-1.89 Hindusthan Dev. Corp 2,068,000 2,032,000

B-1.90 Jaipur Polyspin 118,000 126,000

B-1.91 Dawn Mills 23,000 23,000

B-1.92 Mafatlal Fine 94,000 94,000

B-1.93 Kirloskar Bros. 97,000 97,000

B-1.94 Kopran Limited 53,000 53,000

B-1.95 Kirloskar Cummins 1,080,000 1,005,000

B-1.96 Bombay Dyeing III 11,423,000 838,000

B-1.97 Gokak Patel Volkart 16,000 16,000

B-1.98 Motor Industries II 2,156,000 2,156,000

B-1.99 Prashant Textiles Cancelled

B-2.00 FagPrecision 3,577,000 2,601,000

B-2.01 Larsen & Toubro 83,000 83,000

B-2.02 Flender Macneil 70,000 70,000

B-2.03 Kunal Engg. Cancelled

B-2.04 Vegetable Vitamins 214,000 214,000

B-2.05 VST Industries 99,000 99,000

B-2.06 Century Textiles 4,522,000 4,522,000

B-2.07 Bajaj Auto 1,456,000 1,456,000

B-2.08 Toscana Shoes 31,000 31,000

B-2.10 Ballarpur Ind. 1,786,000 1,786,000

B-2.11 Atic Industries Cancelled

B-2.12 Mysore Kirloskar 34,000 0

B-2.13 Procter & Gamble 92,000 0

B-2.14 ION Exchange 20,000 0

B-2.15 Rallis India 101,000 0

B-2.16 Lupin Laboratories 94,000 83,000

B-2.17 Sri Shanmugavel Mill Cancelled 0

B-2.18 D.C. Synthetics Cancelled 0

B-2.19 Dicitex Industries Cancelled 0

B-2.20 Brakes India 289,000 0

B-2.21 Asian Cables 49,000 0

B-2.22 Salem Textiles Cancelled 0

B-2.23 Krohne Marshall 33,000 0

B-2.24 Goldtex Furnishing 84,000 84,000

B-2.25 Sree Rajendra Mills Cancelled 0

B-2.26 Ifiunik Pharma 189,000 189,000

B-2.27 Adi Hi-Tech Cancelled 0

B-2.28 Bausch & Lomb 924,000 0

B-2.29 Parasrampuria Synth 161,000 161,000

B-2.30 National Leather Cancelled 0

B-2.31 Madura Coats 1,591,000 0

B-2.32 Soundararaja Mills 173,000 0

B-2.33 Kirloskar Brothers 68,000 0

B-2.35 TVS Sewing Needles Cancelled 0

B-2.36 Bharat Gears Cancelled 0

B-2.37 MRF Limited 1,937,000 0

B-2.38 Orient Syntex Cancelled 0

B-2.39 Leela Fashions 134,000 0

B-2.40 Palani Andavar Cancelled 0

B-2.41 ITC Limited 957,000 0

B-2.42 Best Built Leather Cancelled 0

Total 113,601,346 72,048,272


Industrial Credit and Investment Corp. of India Ltd.


Sub-Loan No. Name Amt. Authorized Amt. Disbursed

(US$) (US$)

TA-4.01 Roto Dumps 57,692 28,615

TA-4.02 Sona Steering Systems 129,395 129,411

TA-4.03 The Arvind Mills Ltd. 60,595 21,407

TA-4.04 Gold Seal Engg. Prod. Pvt. Ltd. 22,225 25,630

TA-4.05 Amphetronix Ltd. 38,890 36,592

TA-4.06 Coventry Springs & Eng. Co. 40,740 40,667

TA-4.07 Ring Gears India Ltd. 38,890 38,890

TA-4.08 Scientific Fertilizers P. Ltd. 18,520 16,074

TA-4.09 Infotech Enterprise Pvt. Ltd. 18,520 18,519

TA-4.10 Pond's (I) Ltd. 107,407 103,296

TA-4.11 Thapar Waterbase Ltd. 118,519 10,926

TA-4.12 Lucas TVS Ltd. 148,148 135,889

TA-4.13 Hi-Rel Components 17,852 13,148

TA-4.14 Teletubes electronics LTd. 165,185 160,889

TA-4.15 ICC CAD Center 25,926 25,926

TA-4.16 Ranbaxy Laboratories Ltd. 274,074 274,027

TA-4.17 Mahindra & Mahindra Ltd. 481,481 413,852

TA-4.18 ITC Ltd. 81,481 81,481

TA-4.19 Batliboi & Co. Ltd. 75,222 488,889

TA-4.20 Khimline Pumps Ltd. 51,852 9,259

TA-4.21 Perfect Circle Victor Ltd. 55,556 55,556

TA-4.22 Godrej & Boyce Mff. Co. Ltd. 51,852 43,889

TA-4.23 O/E/N Connectors Ltd. 27,111 0

TA-4.24 General Optics (Asia) Ltd. 44,444 47,481

TA-4.25 Royal Cushion Vinyl Prod. Ltd. 37,037 37,037

TA-4.26 Autolec Industries Ltd. 22,222 26,037

TA-4.27 Gabriel India Ltd. 62,963 62,963

TA-4.28 Nath Seeds Ltd. 19,185 10,703

TA-4.29 Veera Treatwood Ltd. 2,963 2,963

TA-4.30 GSL (India) Ltd. 7,407 7,407

TA-4.31 S.S. Miranda Ltd. 33,333 33,333

TA-4.32 Stellar Modular Systems Pvt. Ltd. 9,423 9,423

TA-4.33 Sundram Fasterners Ltd. 26,923 26,923

TA-4.34 Crompton Greaves Ltd. 34,615 34,615

TA-4.35 Garware Wallropes Ltd. 88,462 88,462

TA-4.36 Nahar Spinning Mills Ltd. 8,077 1,767

TA-4.37 New Plastomers India Ltd. 5,192 0

TA-4.38 Asher Textiles 12,308 4,077

TA-4.39 Nirup Synchrome 5,385 5,000

TA-4.40 Sundram Fasterners Ltd. 92,308 68,923

TA-4.41 Ashok Leyland 150,000 150,000

TA-4.42 Ballarpur Industries Ltd. 87,900 53,323

TA-4.43 Toscana Shoes Ltd. 48,390 0

TA-4.44 Engine valves Ltd. 100,000 96,354

TA-4.45 Hindoostan Spg. & Weaving Mills Ltd. 200,000 173,133

TA-4.46 Wires and Fabriks Ltd. 58,065 58,226

TA-4.47 Brass Smiths 11,300 5,909

TA-4.48 Grapco Granites Ltd. 33,333 0

TA-4.49 Weston Electronick Ltd. 13,750 0

TA-4.50 Arun Opticals LTd. 2,900 2,900

TA-4.51 Atul PRoducts Ltd. 9,774 2,355

TA-4.52 Transpek Industries Ltd. 7,260 3,388

TA-4.53 Alkyl Amines Ltd. 5,000 0

TA-4.54 Paushak Ltd. 16,130 7,677

TA-4.55 Bhagat Fine Chemicals 8,870 8,870

TA-4.56 Praj Counseltech Pvt. Ltd. 30,645 30,645

TA-4.57 CIBATUL 1,996 1,996

TA-4.58 Morris Electronics Ltd. 50,000 50,000

TA-4.59 Infosys Technologies Ltd. 76,700 76,692

TA-4.60 Kilburn Engineering 50,000 46,933

TA-4.61 Blow Plast Ltd. 89,340 89,333

TA-4.62 Larsen & Toubro 200,000 0

TA-4.63 Nichrome Metalworks P. Ltd. 62,000 62,037

TA-4.64 Bakelite Hylam Ltd. 92,000 42,630

TA-4.65 Protecto Engineering Ltd. 55,560 55,555

TA-4.66 Taj Rhein Shoes Ltd. 92,600 82,815

TA-4.67 Hico Products Ltd. 57,000 5,555

TA-4.68 Vir Rubber Pvt. Ltd. 55,560 8,407

TA-4.69 Sundaram Clayton Ltd. 76,000 43,148

TA-4.70 Electronica Sales & Services 10,500 555

TA-4.71 Rathi Dye Chem Pvt. Ltd. 6,500 5,926

TA-4.72 Lakshmi Precision Screws Ltd. 9,300 0

TA-4.73 Automotive Component Mfrs. 103,700 0

TA-4.74 South India Viscose Ltd. 29,000 29,004

TA-4.75 Lakme Exports Ltd. 27,000 0

TA-4.76 Ultratek Devices Ltd. 74,000 73,991

TA-4.77 Mukund Ltd. 40,000 25,158

TA-4.78 Isha Steel Processors Ltd. 6,100 6,100

TA-4.79 Hindustan National Glass Industries 8,800 8,800

TA-4.80 Purolator India Ltd. 43,000 43,003

TA-4.81 Salem Textiles Ltd. 54,839 645

TA-4.82 Parasrampuria Industries Ltd. 6,452 3,871

TA-4.83 CEAT Ltd. 19,276 0

TA-4.84 GML Chip Components Ltd. 44,936 3,005

TA-4.85 Secals Ltd. 28,775 0

TA-4.86 Talbros Automotive Component Ltd. 17,729 17,727

TA-4.87 Silicon Valley Technology 18,900 8,591

TA-4.88 S. Kumar Enterprises 25,806 0

TA-4.89 Talbros Automotive Components 32,600 0

TA-4.90 E.I.D. Parry (I) Ltd. 50,000 50,000

TA-4.91 The National Leathercloth Mfg. Co. 32,258 32,258

TA-4.92 Mafatlal Fine spg. & Mfg. Co. Ltd. 37,337 37,341

TA-4.93 The Morarjee Goculdas Spinning & Weaving Co 35,032 5,185

TA-4.94 Mafatlal Industries Ltd. 37,337 37,341

TA-4.95 Majestic Auto Ltd. 66,667 66,667

TA-4.96 Startek Ceramic India 100,000 100,000

TA-4.97 Rathi Dye Chem Pvt. Ltd. 32,258 36,741

TA-4.98 Patheja Forgings & Auto Parts Mfg. 50,000 0

TA-4.99 Miranda Tools 16,129 13,548

TA-5.00 Flakt India Ltd. 16,667 18,200

TA-5.01 S & S Power Switchgears Ltd. 100,000 100,000

TA-5.02 E.L.F. Filament Pvt. Ltd. 35,000 35,005

TA-5.03 Paranjape Metal Shaper Pvt. Ltd. 35,000 22,598

TA-5.04 Precision Tools & Castings Pvt. Ltd. 100,000 100,000

TA-5.05 Garware Wallropes Ltd. 12,600 8,766

TA-5.06 Cibatul Ltd. 21,700 10,608

TA-5.07 Widia (India) Ltd. 67,000 67,000

TA-5.08 BHL Aircraft Batteries Ltd. 43,750 0

TA-5.09 Basant Wire Industries Pvt. Ltd. 40,000 40,000

TA-5.10 Tamarai Mills Ltd. 48,438 43,817

TA-5.11 Pentaplast Electronics Ltd. 7,226 5,355

TA-5.12 Tata Industries Ltd. 200,000 193,750

TA-5.13 Infotech Enterprises Pvt. Ltd. 31,250 25,750

TA-5.14 Intech Exports 55,650 57,871

TA-5.15 Inapex Auto Products Exports Ltd. 30,645 19,709

TA-5.16 Syngene Int'l Private Ltd. 50,000 0

TA-5.17 Cosumer Electronics & TV Manufactures 109,375 0

TA-5.18 Sundaram Fasteners Ltd. 100,000 0

TA-5.19 Hi-Tech Investment Castings Ltd. 15,873 0

TA-5.20 Surya Morphy Richards Ltd. 100,000 0

TA-5.21 Raajratna Metal Industries Ltd. 36,000 0

TA-5.22 Real Value Appliance Ltd. 100,000 0

TA-5.23 Srinisons Cables Ltd. 23,188 0

TA-5.24 The Gramaphone Co. of India Ltd. 69,682 0

TA-5.25 Geometric Software Services Ltd. 14,493 0

TA-5.26 Neuland Laboratories Ltd. 39,450 0

TA-5.27 Lyka Laboratories Ltd. 87,942 0

TA-5.28 Dolphin Laboratories Ltd. 17,715 0

TA-5.29 Triumph Research and Holdings 14,493 0

TA-5.30 Speck Systems Ltd. 39,057 0

TA-5.31 Thirumani Auto Ancillaries 15,217 0

TA-5.32 Britannia Industries Ltd. 45,972 0

TA-5.33 Fortune Bio-Tech Ltd. 29,278 0

TA-5.34 Manufacturers Asso. of Info. Tech. 100,000 0

TA-5.35 Famy Care Ltd. 34,222 0

TA-5.36 Access Information Systems Pvt. Ltd. 32,277 0

TA-5.37 Montana International Ltd. 19,639 0

TA-5.38 Technova Imaging Systems Ltd. 35,556 0

TA-5.39 Targof Pure Drugs Ltd. 15,237 0

TA-5.40 Galaxy Surfactants Ltd. 13,500 0

TOTAL 7,371,084 5,123,098

ANNEX 4

EXPORT DEVELOPMENT PROJECT (IBRD 3058 IN)


EXPORT IMPORT BANK OF INDIA

EXECUTIVE SUMMARY

BACKGROUND

Export development project loan (IBRD 3058 IN.) was extended by World Bank to Governmentof India vide agreement dated May 26, 1989. The purpose of the loan was to enhance the exportcompetitiveness of Indian manufactured products in the global market through upgradation of productionfacilities and implementation of strategic and structured export market development activities. This projectwas a follow up programme to the earlier World Bank project, Industrial Exports (Engineering Products)IBRD 2629 IN, implemented between 1986 to 1992 which produced very encouraging results. The secondloan comprised a component of US$ 100 million for upgradation of production facilities, USS 20 missionfor export market development activities and Japan grant component of US$ 2.7 million as technicalassistance fund (TAF) for implementation of the project. There were four implementing agencies viz.Exam Bank, ICICI, Bank of Baroda and Canara Bank. Exim Bank was allocated US$ 27.92 million forextending rupee term loans to eligible Indian companies for supply side upgradation, US$ 7 million forextending as matching grant to eligible companies towards export marketing activities and USS 1.04million as TAF for strengthening the Bank's own capabilities. The project commenced on August 18,1989 and concluded on March 31, 1996.

PROJECT IMPLEMENTATION

Exim Bank extended rupee term loans to 43 companies for 44 projects for enhancing themanufacturing facilities through setting up of new projects, expansion, diversification and modernization.The total amount sanctioned was USS 27.92 million. The first sanction occurred on March 16,1990 andthe last sanction on April 15, 1993. The major industrial subsectors supported by Exim Bank under theloan include auto parts, light, engineering, textiles, chemicals, pharmaceuticals, consumer products andcomputer software. The total amount disbursed was Rs. 707 million, equivalent to US$ 27.69 millionbased on average exchange rates prevailing at the time of disbursal of loans. The total investment made bythe participating companies amounted to Rs 1525 million. While an amount of Rs. 707 million wasinvested out of World Bank funds, the balance was met out of internal accruals as well as loans from EximBank out of its own funds.

Sector wide disbursement in case of Loan component is given below.Number of Amount disbursed % of total

projects Rs. million disbursementAuto ancillaries 9 153.2 21.6%Consumer goods 5 100.7 14.2%Textiles 5 74.1 10.5%Software 5 66.2 9.7%Engineering 5 94.2 13.3%Chemicals 3 32.3 4.6%Leather 5 61.3 8.7%Pharmaceuticals 2 23.6 3.4%Others*** 5 101.6 14.0%Total 44 707.37 100.0%*** Others include Rubber, plastics, Food processing and Electronics

2

As can be seen above, Auto ancillaries accounted for maximum utilization of the loan amount.This sub-sector also was the highest in terms of number of projects and amount committed. disbursementwas made in equivalent Indian rupees. The disbursement amount indicated above is the approximate rupeeequivalent of US$ amount debited against each loan account in the World Bank records. Our calculation isbased on average exchange rate prevailing in the year of disbursement. Grant component of US$ 7 millionwas utilized to support 121 export market development plans of 118 companies. three companies weresanctioned multiple grants to implement stagewise export entry plans. The major industrial sectors andsubsector covered included auto parts (19), machine parts (16), electrical components (14),pharmaceuticals (10), consumer goods (I1), computer software (8), casting and forging (7), textiles (7),chemicals (4), biotech (4) and miscellaneous products (21), which included products like dried flowers,photovoltaic cells, fishing nets, hard polymer lenses, cork based leisure goods, etc. The total sanctionsamounted to US$ 7.44 million and the disbursement were Rs. 169.44 million. An additional amount of Rs.19.4 million was adjusted for disbursement under IBRD 2629 IN. Thus total utilization amounted to Rs.188.9 million. In terms of sanctions and disbursements, auto parts accounted for 14% and 16%. whilepharmaceuticals at 13% and 12%, machine parts at 13% and 12% were close behind. Miscellaneousproducts accounted for 16% of the sanctions and 17% of the disbursements. Nearly 60% of the Granteecompanies were first time exporters embarking upon market entry operations. 28% of the granteecompanies were expanding their export operations and the balance diversifying from former Sovietmarkets.

The major activities under the grant programme include market research (13%), productadaptation (10%), product inspection (8%), Quality certification (7%), training (4%). business promotiontravel (22%). Others include trade fair participation. ISO 9000 certification, promotional materials, buyer'svisit, etc. (16%).

Under the TAF (Japan grant JG 2727) an amount of US$ 1.04 million was utilized by Exim Bank.The activities covered under the TAF included Group training programme, Arthur D'Little marketingseminar, case book advertising, Exim staff training, books and training material, setting up export servicecenters at Rome and Budapest. The above activities greatly helped Exim Bank to upgrade the professionalskills of its officers, mount promotional activities to market the EMF programme. set up two export servicecenters at Rome and Budapest to provide value added information and advisory services to exportin,companies.

Disbursement of funds from World Bank to EXIM Bank was through Government of India (GOI).Term loan component of US$ 27.9 million was reimbursed by way of contribution to the equity capital ofExim Bank. Between 1990 to 1996, an amount of Rs. 856.7 million was paid to Exim Bank by theGovernment of India as equity capital UT of World Bank funds. The reimbursements by GOI was made atexchange rates prevailing at the time of reimbursement. The grant component and TAF were reimbursedas expenditure. As on March 32, 1996 an amount of Rs. 183.4 million was reimbursed by GOI to Eximtowards grant and TAF disbursements.

Exim Bank implemented the project by setting up a special cell at its headquarters in Bombay,headed by a senior executive. Product officers, specially trained to handle the export marketing, projectappraisal and monitoring were posted at HO in Bombay (Mumbai) and its various offices at New Delhi.Madras, Calcutta and Bangalore. The product officers using extensive database and back up support fromExim's overseas office at Washington D.C. and Singapore were able to provide valuable advisory servicesto the companies in designing and implementing export marketing plans. An elaborate software systembased on Relational Database management software (RDBMS) was developed to maintain and monitor theGrant and loan accounts and asses the progress of implementation and export performance. Periodic visitswere made to the assisted companies and corrective action, whenever required was taken. Constantinteraction with World Bank was maintained through Exim's Washington D.C. office. Progress wasmonitored jointly with the WB review missions that visited at regular intervals during the project cycle.Excellent co-operation and guidance were received from the World Bank throughout the project period.Exim bank was able to sponsor many innovative promotional activities like conducting work shops for

3

company executives, case book advertisement campaign, publication of sector studies etc. under TAF dueto the positive attitude and response of World Bank.

PERFORMANCE OF ASSISTED COMPANIES

The impact of the programme on the export performance of the assisted companies has been impressive.a) The total incremental exports registered by the assisted companies during the four year period

1992 to 1995 amounted to Rs. 17.2 billion giving an export multiplier factor (incremental exportsto grant disbursed) of 102 in real terms on weighted average basis.

b) The exports of the assisted companies grew at a rate of 39% during 1992-95 in rupee terms and26.2% in dollar terms as against national export growth at CAGR 15.2% in dollar terms during thesame period.

c) While the assisted companies registered a sales growth of 18.9% CAGR, their exports grew at afaster rate at 39% during 1992-95, thereby making exports as engine of growth.

d) exports to sales ratio of the assisted companies increased from 8.85 on 1992-95 to 11.4% in 1994-95.

e) Sub-sector industry comparison indicates that companies assisted under EMF programmeperformed better in exports than the subsector as a whole. Exports of textile companies assistedunder the programme registered CAGR 77% as against CAGR 24.2% of the textile sector.Similarly, auto parts units showed 44% per annul growth as against 26% growth for the sub-sector. Pharmaceutical companies clocked 36% p.a. export growth as against 20% for thesubsector. One gold jewelry unit assisted under the programme registered an export growth of365 p.a. as against 9% growth rate for the subsector as a whole. This analysis clearly indicatesthat the companies who implemented strategic export development plans performed much betterin exports than the others in the same industry sub-sector.

f) Ten assisted companies have moved up the value chain and have joint ventures or subsidiariesoverseas to consolidate and expand their export operations. Theses overseas ventures inmanufacturing and/or marketing are located in various countries like U.K., Ireland, Netherlands,Hungary, Malaysia, Singapore, Mauritius, Uzbekistan, Russia. The products covered includequartz and jewelry watches, herbal products, telecom peripherals, pharmaceuticals, PVC sheets,haberdashery items, fine blanking tools, computer software. Almost all of these companies aremedium sized industries, professionally managed and who have gained confidence to play in theglobal market place through strategic and systematic market development approach.

g) The companies assisted under the loan programme for expansion, diversification ormodernization have shown impressive projection of financial rate of returns. The average IRR is27.6%. The maximum IRR at 41% is for software units while IRR at 20% for pharmaceuticalsunits. The sales and profitability of the assisted companies registered for the period 1992 to 1995indicate that the projections estimated at the time of appraisal have been realistic. The 43companies assisted under the loan programme have registered sales growth at 22.4% p.a. (CAGR)and exports growth at 30.1% p.a. (CAGR). All loan accounts except two are serviced regularlywith no overdue position.

h) The 44 investment projects included setting up new manufacturing facilities, expansion.diversification or balancing the capacity. Approximately 1500 additional jobs have been createdby these projects.

i) Out of the 118 grantee companies, 114 belongs to SME category whose net fixed assets were lessthan USS 30 mission. 104 of these companies had net fixed assets less than US$ 15 millionswhich indicates that 88% of the grant beneficiaries were really small and medium sizedenterprises. In the case of loan facility, 36 out of 43 companies were case of loan facility, 36 of43 companies were SME's with net fixed assets less than USS 15 million.

j) The total exports generated by the 118 grantee companies during the four year period (1992-95)amounted to Rs. 48.7 billion (USS 1.6 billion). Similarly, the total exports generated by 43 loancompanies amounted to Rs. 21.35 billion (USS 730 million). However, there were 20 companieswhich utilized both loan and grant facilities.

4

BENEFITS OF TAF SUPPORT

The technical Assistance Fund (Japan Grant) enabled Exim Bank to carry out number ofinnovative activities aimed at building export competitiveness of assisted companies. Part of the funds wasalso utilized to enhance the skills of Exim officers and equip them to implement the project successfully.EXIM Bank was able to engage the services of experts from Arthur D'Little institute of management toconduct specialized workshops on International marketing strategy" at two centers in India for the benefitof chief executives and export Directors of assisted companies.

Exim Bank utilized the grant to carry out sector studies on emerging export products using theservices of international consultants and specialists. Value added jute products and floriculture were thetwo subjects where foreign experts from Denmark and Netherlands were involved in market study. Theother subjects covered under the TAF grant funding include dyestuff, electronic components, consumerelectronics, computer software. These research and market studies were found very useful by theexporters.

The most innovative use of Japan Grant was to set up two export service centers at Budapest andRome to provide value added information and advisory services to Indian companies to internationalizetheir operations. The fee based services have become very popular with Exim's clientele and are beingused extensively.

Part of the grant was utilized to bring out a case analysis book (Achieving Excellence: TataMcgraw Hill publication) highlighting the successful export efforts of six medium sized companiessupported under EMF programme. The book, first of its kind dealing with Indian case studies has beenfound very useful by potential exporters and has also received acclaim from various international agencies.

LESSON LEARNT

As an implementing agency, Exim bank was closely involved in monitoring the operations ofassisted companies. Information and advisory services appeared to be an important area where thecompanies were not getting adequate support from professional agencies. This motivated EXIM Bank toset up its own Export services group to provide proactively value added information and advisory servicesto help companies in their internationalization efforts. Setting up two export service centers overseas andcreating and Eximius Club for providing specialized proactive services including partner search, jointventure facilitation, etc. were the results of the experience gained from implementing the EMF programme.Exim Bank was able to expand the range of its financing programs and introduced new schemes to providefinancial support to motivate companies to obtain ISO 14000 certification for environmental safety, QS9000 for auto exports to USA and GE/GS certification for export to capital goods/equipment to EU. ThusEXIM Bank was able to respond quickly to the challenging needs of the international market.In the case of investment projects, Exim gave equal importance t Economic Rate of Return (ERR) andsocial cost benefit analysis apart from the financial returns of the project. Environmental protection andpollution control aspects were given highest consideration while approving the investment projects.International standards were insisted upon whenever the project/process resulted in environmentalpollution.

Close interactions with the World Bank review missions enhanced the project monitoringcapabilities of the Bank. Periodic project reviews and monitoring resulted in excellent collection record.Except two accounts there have been no overdues.

PROJECT SUSTAINABILITY

The companies which have benefited from the programme and shown good export performanceare likely to be long term players in the international market. These companies will be in a position togenerate internal funds to carry on the export development activities. Some of the assisted companies haveclearly globalised their operations by setting up manufacturing and marketing ventures overseas to

5

strengthen their presence in the target market. These have been assisted by Exim's overseas investmentfinance programme.

Due to demonstration effect, more and more medium sized companies are now in the process ofmaking strategic entry into overseas market. These new entrants would need support initially. Lowinterest/soft term loans would be needed to support the initial operations. EXIM currentlv provides fundsfrom its own resources to support such activities. However a new loan from World Bank for exportdevelopment activities would go a long way in concretizing the gains from the earlier projects. This isparticularly important in view of the liberalization of Indian economy, where Indian companies arebeginning to encounter stiff competition not only abroad, but in India also. A new export sector loanwould strength the efforts of the Indian companies to stay and progress in a changing environment.

BANK OF BARODACENTRAL OFFICE, MLDMBAI-23

E XPORT DEVE LOPrMENT PFROJEC T(L OA 3=05E8-IN)

RE'VIELW NOTE:

1.0 BACKGROUND

1.1 Industrial Bank for Reconstruction and Development (IBRD)has been providing lines of credit for many years forsupporting industrial projects in India.

1.2 Initially the line of credit was confined only to financialinstitutions like ICICI, IDBI etc and subsequently e.-tendedto the commercial Banks. The four participating banks (PCBs)which were selected for extending the line of credits wereBOB, Canara Bank,Punjab National Bank and SBr under thefirst line of credit IEP (Industrial Export Projects) Loan-629-IN which were extended to units serving as ancilliaryto DEMs (Original equipment manufacturers), importsubstitute or export oriented units.

1.3 The first sch-me IEP which started from January 1986 andcompleted during 1992 was successfully implemented by BOB.BOB _ubmitted a completion report on IEP to World Bankduring November 1992 on IEP to World Bank.

?.4 The present note is to review the performance under thesecond line of credit viz.. Export Development Project (EDP)loan 3058-IN which commenced from Sept.1989 and ended inMarch 1996. This line of credit provides Term loan to unitshaving export orientation and unlike the first scheme evenRupee expenditure towards fixed assets were reimbursed tothe extent of 80% of the term loan and 100% in case offoreign component sdbject to a ceiling of * I Million.

1.5 BOB took steps and obtained net approval of the Banksubprojects totalling US S 30/- Million being the entireamount allotted by 31.1.91.

1.6 The Bank supported the efforts of BOB and provided anadditional US S 20/- Million among PCB to be utilised onfirst come first serve basis.

1.7 BOB which had exhausted the allocation of US $ 30/- Millionmuch faster; could identify more projects and obtainedapproval for them taking the total approval to nearly US $50/- Million.

1.8 As on 31.3.94, BOB had obtained approval for 112 subprojectswith a total amount of US * 49.85 million and by 31.3.95disbursed $ 45.48 Million.

1.9 BOB had identified 11 major industries for support under EDPwhich include among others Textile,Dyes and Chemicals,Pharmaceuticals, Engineering, Gem and Jewellery, Granite andfew others.

I'~~~~~~~~~~~

2.o OBJECTIVE:

2.1 The basic objective of EDP was to support the efforts ofIndian Financial Institutions and Banks in term lending toindustries mostly in small and medium sector which wouldhelp them to cater to the export market.

- 2 Realising the need to save foreign exchange the schemesupported projects which had export orientation. Thesupport under EDP was for existing and new units to acquirefixed assets, indigenous or imported. Canara Bank, EximBani. and BOB were the participating Banks for EDP.

2.3 In addition to the above, the implementation of EDP wasdirected in improving the appraisal skills of PCBs.

2. 4 The Bank had also allotted an amount of $ 3.381 Millionunder the grant assistance scheme EDF (a component-of EDP)towards the export promotional efforts financing by way ofreimbursement 50% of the expenditure incurred subject to amaximum of S 50,000.

3.0 GEOGRAPHICAL COVERAGE:

3.1 BOB has been able to disburse the amount of $ 45.49 Millionto various industries out of the total authorisation of $49.85 with and the geographical spread as under:

$ MILLIONZONE AUTHORISED, DISBURSED NO.QF

UNITSMaharashtra & GoaI B G Z ) 5.92 5.47 12

Eastern (EZ) 2.72 2.33 4

Northern (NZ) 4.26 3.21 5

Eastern UP (EUP) 0.58 0.22 1

Bombay Main (BDO) 4.56 3. 7 13

North Gujarat (NGZ) 3.06 3.07 10

Western UP (WUP) 0.77 0.78 1

Central Gujarat(CGZ) 1.85 1.81 6

Greater Bombay (GBZ) 10.12 9.09 24

Southern Zone (SZ) 16.01 15.79 32

T O T A L 49.85 45.49 108

3.2 About 60% of the units are located in smaller towns/backward area and the balance in largeritowns/metropolis/developed areas.

4

4.0 STATUS & PERFORMANCE OF SUSPROJECTS:

4.1 Around 96% of the subprojects approved by the Bank as ondate have implemented the scheme fully ( 108 subprojectsimplemented out of 113 approvals received. 5 projects, viz.MIs Oro Leathers, Trak Leathers, Indus Woven Labels , IndusSaccharides and Mohan Leathers did not avail the assistancetotalling S 1.42 Million. One sub-project had anauthorisation of only S -10 and did not avail the same.

4.2 A complete detailed statement of EDP units zonewise is givenin the Annexure II . BOB has also allocated these unitshealth code number according to their performance viz.units whose term commitments are not defaulted & those withunsatisfactory operations given higher codes.

4.3 Of the 108 units in operation, 98 units are classified asHealth Code 1; 7 units have Health Code 2 and only _ unitshave Health Code 3 & above.

4.4 While some of the projects have performed satisfactorily andare regular in servicing their term liabilities certainunits like granite, food and electronics are functioningbelow expectations due to management problems, recessionboth in domestic and international markets and due to delayin implementation resulting in low level operations. It isobserved that 37 units are performing below expectationsthough some of these sub-borrowers are regular in meetingtheir term liabilities.

4.5 There are about 20 cases where BOB has rescheduled therepayment of instalments in projects where there has been adelay in the implementation or for some other reasons.There are certain projects which have already repaid theirterm liabilities prior to schedule.

4.6 Out of the term loan disbursed 80% was utilised for purchaseof machineries and the balance for other fixed assets. Outof this, nearly 50% has been utilised for import ofequipments.

5.0 TYPES OF SUBPROJECTS

5.1 The subprojects identified by BOB and approved by the Bank,covers wide range of 11 industry groups. The details ofindustry-wise exposure is as under:

I N D U S T R Y NO. OF UNITS AMOUNT( US S lacs)

1. Chemicals 12 41.79

2. Textile/Garments 25 144.62

3. Engineering 23 101.47

4. Electronics 4 14.43

5. Pharma 5 17.97

6. Software 2 2.20

7. Food 4 20.72

8. Gems 10 21.94

9. Granite 2 10.76

10. Packing 3 13.04

11. Leather 3 2.77

12. Others 15 63.26

108 454.80

5.2 Out of the 113 subprojects approved by the Bank; 65 arebelow the free limit US S 500,000/- and the remaining 48 areabove the free limit.

5.3 The average lending size of the subproject is around US S4,41,169/-.

6.0 EXPORT DEVELOPMENT FUND (EDF)

6.1 BOB with an allocation of US $ 3.381 Million for Grantsupport to export marketing activities had also takensteps to utilise this amount.

6.2 As on Dec.93, BOB had obtained approval for 94 subprojectsfor EDF assistance to units in various regions in thecountry.

6.3 BOB's grant support also covers wide range of industr:alproducts like Software, Pharmaceutical, Chemical, '( co w Engg.items, Leather, Textiles etc. and has disbursed aroundRs.500 lacs so far. _

6

6.4 The activities covered under BOB's grant assistance includeMarket Research,.Travel, Participation in Trade Fairs, ISO9000 Certification, Product Registration etc. and theexposure is as follows:

Travel Y5.

Trade fairs s 25%

Sampling s 10%

Advertising : 10%

Buyers- visits 5%

Others : 15%(Consultancy,

ISO certification,Product adaptation etc)

100%

6.5 BOB is strictly monitoring the disbursement of grant whichare made based upon their incremental export especially inhard currency area.

6.6 The zonewise authorisation under EDF is as under

Nhs Zone No of Authorised AmountUnits (S lacs)

1. Mah & Boa Zone 17 6.71

2. Central Guj.Zone 4 1.80

3. Rajasthan Zone 5 1.92

4. Western UP Zone 5 1.55

5. Eastern UP Zone 1 0.27

6. South Zone 13 4.15

7. Eastern Zone 3 0.94

8. Bombay Main Office 2 0.87

9 North Zone 5 2.04

10. North Guj.Zone 2 1.00

11. Greater Bombay Zone 32 12.55

89 33.81 F---- ------- cf*~ **

Iet, "I

6. 7 The industrywise-authorisation is given as under:

No. Industry No. of Authorisation AmountUnits (S lacs)

1. Engineering 22 8.89

2. Electronics 4 1.46

3. Software 11 3.98

4. Leather 4 1.27

5. Granite 2 1.00

6. Handicraft 7 2.15

7. Chemical 16 5.70

8. Textile 11 4.45

9. Packaging 1 0.50

10. Others 11 4.41

89 33. 81

6.8 BOB requests Bank's support to continue EDF for atleast onemore year considering the balance (nearly S 1 million)available and as the criteria of monitoring incrementalexports is stipulated by IBRD for 5 years.

7.0 TECHNICAL ASSISTANCE FUND:

7.1 BOB had sent 6 officials for training under EDP to Arthur DLittle, Cambridge, between Aug. '90 to Dec. 90 in Boston andother places . Subsequently during August 1995, 4 officershave been sponsored to the course on Project Finance,conducted by Euromoney in Bangkok and Jakarta.

7.2 Out of total allocation of US * 0.4-5 million to BOB underTAF for training purpose only S 0.150 Million (approx) hasbeen utilised. BOB proposes to utilise the balance fortraining its officers on the Environmental aspects, a highpriority area of both GOI & the World Bank.

7 3 BOB is keen to utilise the balance amount and currentlyworking on plans in identifying specific short durationtraining programmes to benefit large number of officials inenvironment for which BOB has already indicated to IBRD andresponse is awaited.

'c

7.4 BOB will be appproaching the Bank shortly with a concrete

plan in this regard once we receive approval. BOB alsorequests extension of TAF for utilising the balance

available.

8.0 BENEFITS OF THE SCHEME:

8.1 BOB has been targetting under EDP Loan, only clients withstrategic export plans.

8.^ The selected industry groutps assisted by BOB under EDP and

the estimated net foreign exchange earnings are as under

(Rs.Million)

Industry Group Appro x. Exports Approx.FEearnings in 3 years saved

…__ _ _ _ _ _ _ _ _ _ _ _ _ - - - - - - - - - - - - - - - - - - - -- - - - - - - - -

1. Engineering 8BO 300

2. Textile (includingGarments ) 1500 1050

3. Chemical i000 500

4. Drugs/Pharmaceu-ticals 600) 25C'

5. Gem/Jewellery 3000) 100')

6. Software 300 180

7. Others(incl leather) 50 50

S. Packing lVO 20

S. Electronics 250 50

10. Granite 5 0) zoo

il. Food 200 100

8600 3800

9.0 SUBMISSION

9.1 BOB after careful examination and keeping in view the

objective of promotion of export oriented units has selectedonly such industries having strategic export expansion

plans covering a variety of industrial groups and wide

geographical spread for funding under EDP.

$.2 The World Bank and its officials in the India Division have

been encouraging and supporting the efforts of BOB, but for

which, it would not have been possible for BOB not only to

commit. this line qiick ly, btt. also tca disburse 19r% of '

ita-thorised amount. *

q

9.3 The investment has helped the industries in upgradingtechnology and in saving / earning net foreign exchange forthe country.

9.4 A large portion of the exports made by the units is todevelop countries reflecting the quality and competitivenessachieved by the Indian entrepreuners in the overseas market.

9.5 The investment has been located mostly in small towns/villages and the benificiaries are by and large small andmedium industries.

9.6 10 officers were benefitted with training under TAF whichhelped them play an active role in identifying andappraising projects under EDP/EDF and Project Finance.

9.7 BOB has requested IBRD to extend the Grant Assistance Scheme(EDF) for at least one more year as the incremental exportscriteria is fixed by Bank for 5 years and disbursements arebeing made by monitoring performance; and also the extensionof TAF for utilising the balance available.

9.8 The objectives of the scheme on the overall appear to havebeen achieved considering -

a) Satisfactory performance of the majority of subprojectsunder EDP and assisted under EDF.

b) Net foreign exchange savings of Rs 3800 Million over aperiod of -3- years.

c) Wide industrial land geographical spread of the utnitsassisted under the schemes.

d) The projects being supported mostly in the small andmedium sector.

CENTRAL OFFICEPROJECT FINANCE DIVN.MUMBAI It

03.04.96

CANARA BANK

INDIA EXPORT DEVELOPMENT PROJECT (LOAN 3058-IN)


World Bank during 1989 designed the Export Development Project (EDP) to assist Govt.of India in its efforts to sustain and build upon the success in export growth ofmanufactured goods. The project intended to support the task of the Country's keydevelopmental Financial Institutions & Commercial Banks for increasing their finances toexporters. The project was expected to complement the institution's work in twoimportant areas. One, to help them build up their capabilities for providing direction andadvise their clients on export issues and markets. Second, to help them improve their owncapabilities to assess export projects as well as to mobilize additional resources needed tosupport such projects. The project was also expected to provide a basis for continuationof active dialogue between Govt. of India and World Bank on export policy.

This integrated program (EDP) had three components - Export Development Fund(EDF), Technical Assistance Fund (TAF) and Term Lending component (TL). CanaraBank was one of the participating Banks to implement the program. This report dealswith the performance of Canara Bank in implementation of the project and the experiencegathered on implementing the program.

Term Lending Component

Canara Bank was allocated an amount of US$ 30 million under this component to assistexport oriented projects in their investments to upgrade technologies, achieve costcompetitiveness and to enlarge export performance. From the allocated funds, the Bankhas financed 83 clients spread across the country and disbursed US$ 22 million (Rs.619.50million). Major projects assisted were expansion and new ones. The statewide dispersionof the number of projects reflect that the concentration was in Southern States. However,the amount disbursed under the loan shows a better spread. Overall the resources of theprojects were enhanced to the extent of nearly 20 percent. The focus of Bank's assistancewas towards traditional manufactured goods like Apparels, Textiles, Electrical Equipment,Mining Products, etc. On an analysis of the feed back from the assisted clients, it has beenfound that they are able to enlarge their export performance substantially by upgradingtechnology and reducing cost whereby quoting competitive price to their products.Moreover, the projects generated substantial employment especially in Tirupur and thebeneficiaries were successful in enlarging their export markets.

The assistance under this project was mainly for expansion of the activities of existingclients. With higher scale of operation and cost competitiveness achieved, it is expectedthat these clients will sustain their export performance in future. Overall, the project hasbeen implemented successfully and the objectives were fairly achieved.

I

IMAGING

Report No: 16048Type: ICR

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