“The credit required by exporters for financing
their export transaction from time of getting an
export order to the time of full realization of
payment from the importers.
Exporters require finance at two stages at
Pre-shipment stage and Post shipment
Meaning of Pre shipment finance
Its known as Packing credit .
Its an advance credit obtain by exporter from a
bank or financial institution .
RBI defines it as” any loan to an exporter for
financing the purchase ,processing
,manufacturing or packing of goods “
Its is working capital extended to an exporter
Importance of Export Finance at Pre-Shipment
to purchase or acquire supplies of raw material
,components, machinery ,equipment and
technology for production.
To consistently monitor product quality as per
the international standards ,product adaptation
and improvement ,adding new uses to the
For specialized packing for export of goods
according to importers specification and to
avoid damages during transit
To pay for transportation and warehouse
To clear the goods out of inspection ,customs
and excise formalities
To pay for insurance cover against perils of sea
and other risk .
To pay commission to overseas agent and
To pay for advertising promotion
To open and maintain foreign offices for
to extend easy payment terms to foreign