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Export finance


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Export finance

  1. 1. Export Finance
  2. 2.  “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 stage
  3. 3. 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
  4. 4. Importance of Export Finance at Pre-Shipment stage.  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 product .  For specialized packing for export of goods according to importers specification and to avoid damages during transit
  5. 5.  To pay for transportation and warehouse charges  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 distributors  To pay for advertising promotion  To open and maintain foreign offices for promotion  to extend easy payment terms to foreign buyers
  6. 6.  Tariff & non Tariff Measures