Indian small and medium enterprises (SMEs) are being courted by HSBC as it presses the case for using letters of credit (L/Cs) and other risk management products in today's economic climate.

According to HSBC, demand for risk management products is on the increase.

Risk mitigation

"Export-oriented SMEs face three major risks - liquidity, counterparty risk and foreign exchange risk, given the uncertainty in the global economy," according to HSBC's head of SME commercial banking, Dheeraj Dikshit.

"We offer products which help mitigate these risks," he told local media.

Benefits for SMEs

The bank offers two major products to its 70,000 SME customers - L/Cs and forfaiting. According to HSBC, it has seen business volumes double for these products.

The case for L/Cs, according to Dikshit, is that SME customers using them will not only be assured of payment; they could also help businesses break into new and wider markets.

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