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  • Grants & Concessional Finance

Grants & Concessional Finance

Grants, Lines of Credit (LoC) and various forms of concessional finance are active instruments of bilateral development cooperation. Moreover, those are vital instruments for strengthening South-South cooperation (SSC). Grants cover support in the form of larger humanitarian assistance, in-kind contributions, development and economic activities in partner countries. Grants under SSC have played crucial role in ensuring convergence of modalities and has been delivered through industrial goods, equipments and other commodities including agricultural products. With rising economic heft of some of the Southern countries the quantum of monetary assistance has gone up considerably. As an instrument for supporting partner countries, concessional finance has existed since the late 1940s and has found general acceptance in the South. Lines of Credit (LoC) offered by Export-Import Bank of India (EXIM Bank) include goods, services (including consultancy services), machinery and equipment are exported to partner countries. The value of goods and services rendered under such schemes differ from country to country. Interest rates on such advances also vary depending on the quantum, the nature of the projects concerned, and the time over which advances are approved. Concessional finance primarily falls under two categories: loans at concessional rate of interest with or without capacity building component; and loans at commercial rate of interest with different time periods. DAKSHIN would work closely with the Government of India and partner countries in the Global South in finding timely and improved access to those resources.

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