Export Finance Export Finance

““The credit required by exporters for financing The credit required by exporters for financing their export transaction from time of getting an their export transaction from time of getting an export order to the time of full realization of export order to the time of full realization of payment from the importers.payment from the importers.

Exporters require finance at two stages at Exporters require finance at two stages at

Pre-shipment stagePre-shipment stage and and Post shipment Post shipment stagestage

Meaning of Pre shipment finance Meaning of Pre shipment finance Its known as Packing credit .Its known as Packing credit .

Its an advance credit obtain by exporter from a Its an advance credit obtain by exporter from a bank or financial institution .bank or financial institution .

RBI defines it as” RBI defines it as” any loan to an exporter for any loan to an exporter for financing the financing the purchase ,processing ,manufacturing or purchase ,processing ,manufacturing or packing of goodspacking of goods “ “

Its is working capital extended to an exporterIts is working capital extended to an exporter

Importance of Export Finance at Importance of Export Finance at Pre-Shipment Pre-Shipment stage.stage.

to purchase or acquireto purchase or acquire s supplies upplies of of raw raw material ,components, machinery ,equipment material ,components, machinery ,equipment and technology for production.and technology for production.

To consistently monitor product quality as per To consistently monitor product quality as per the international standards ,product adaptation the international standards ,product adaptation and improvement ,adding new uses to the and improvement ,adding new uses to the product .product .

For specialized packing for export of goods For specialized packing for export of goods according to importers specification and to according to importers specification and to avoid damages during transit avoid damages during transit

To pay for transportation and warehouse To pay for transportation and warehouse charges charges

To clear the goods out of inspection ,customs To clear the goods out of inspection ,customs and excise formalities and excise formalities

To pay for insurance cover against perils of sea To pay for insurance cover against perils of sea and other risk .and other risk .

To pay commission to overseas agent and To pay commission to overseas agent and distributorsdistributors

To pay for advertising promotion To pay for advertising promotion To open and maintain foreign offices for To open and maintain foreign offices for

promotion promotion to extend easy payment terms to foreign to extend easy payment terms to foreign

buyers buyers

Tariff & non Tariff Measures Tariff & non Tariff Measures