Chapter 13 discusses export finance, emphasizing the importance of credit facilities in international marketing. It outlines common payment terms like cash in advance and documents against payment, and explains the role of the Export-Import Bank of India in financing and promoting foreign trade through various services. The chapter highlights pre-shipment credit as essential for exporters to manage expenses before shipment.

1. Chapter 13
Export Finance
International Marketing
Chapter-13 Export Finance

2. Objectives
What are the common payment terms
What is the role of institutional finance
for export
What are the objectives and functions
of Exim Banks
International Marketing
Chapter-13 Export Finance

3. Introduction
The international market is generally
very competitive and sensitive and the
credit facilities made available to the
buyers are one of the important
determinants of export business.
The extent to which credit must be
extended to the importer depends on
the sale terms.
International Marketing
Chapter-13 Export Finance

4. Payment Terms
Cash in advance
Open account
Consignment sale
Documents against payment
Documents on acceptance
Documentary letter of credit
International Marketing
Chapter-13 Export Finance

5. Institutional finance for export
Even if the exporter gets payment at
the time of the shipment of goods, he
has to arrange for finance to meet the
expenses involved until the time of
shipment.
These include expenditure on the
purchase of materials and components,
processing, packaging, packing,
marking, transaction, warehousing, etc.
International Marketing
Chapter-13 Export Finance

6. Pre-shipment Credit
Pre-shipment finance also known as packing
credit, refers to the credit extended to the
exporter prior to the shipment of goods.
Pre-shipment credit enables him to meet his
working capital requirements for the purchase
of raw materials and components, processing,
packing, transportation, warehousing, etc.
Packing credit is short-term finance.
It is also advanced International Marketing
against export incentives.
Chapter-13 Export Finance

7. Exim Bank
The Export-Import Bank of India, set-up
in 1982. for the purpose of financing,
facilitating and promoting foreign trade
of India, is the principal financial
institution in the country for
co-coordinating working of institutions
engaged in financing exports and
imports
International Marketing
Chapter-13 Export Finance

8. Objectives And Functions Of
Exim Bank
1. Grant of loans and advances in India
solely or jointly with commercial banks to
persons exporting or intending to export.
2. Grant of lines of credit to Governments,
financial institutions and other suitable
organizations in foreign countries to
enable.
3. Handling transactions where a mix of
government credit and commercial credit
for exports is involved.
International Marketing
Chapter-13 Export Finance

9. 4. Purchasing, discounting and negotiating
export bills.
5. Selling or discounting export bills in
international markets.
6. Discounting of export bills negotiated
7. Providing refinance facilities
8. Granting loans and advances
9. Issuing confirmation/endorsing letters of
credit on behalf of exporters in India
International Marketing
Chapter-13 Export Finance

10. 10. Buying and selling foreign exchange
11. Undertaking and financing research
12. Providing technical, administrative and
financial assistance to any exporter in
India.
International Marketing
Chapter-13 Export Finance

11. Summary
Finance facilities play an important role in the
export business. Some common payment terms
are
i. Cash in advance
ii. Open account
iii. Consignment sales
iv. Document against payment
v. Documents on acceptance
vi. Documentary letter of credit
The Export-Import Bank of India was set up to
provide finance facilities and to promote foreign
trade. International Marketing
Chapter-13 Export Finance