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Trade Finance
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In line with its mission to provide financial facilities for expanding intra-regional trade and promoting the economic development of its member countries, ETDB extends short-term trade finance
loans to selected banks in its countries of operations.
These loans are structured to fund the trade-related advances from local banks to local companies exclusively for pre-shipment and post-shipment finance of foreign trade contracts. Credit
agreements are signed between ETDB and selected banks. (ie: intermediary banks).
All commercial banks based in ETDB member states with an established record of trade finance operations are eligible to apply for being an intermediary bank.
Short Term Trade Finance Facilities
Export Finance Facility is developed to provide financing to exporters of ETDB member countries. Loans may cover both pre-shipment and/or post-shipment
periods of an export transaction.
Exporters may utilize funds through the intermediary banks. ETDB Export Finance Facility provides financing to transactions up to 100 % of the invoice amount when exported goods are produced
in the ETDB Member Countries.
Seller’s Credit: Export finance facilities can also be in Seller Credit format whereby the loan proceeds are disbursed to the exporter directly while repayments remain the obligation of
the intermediary bank.
Import Finance Facility is provided to buyers/importers based in ETDB Member Countries through ETDB’s intermediary banks to finance imports of commodities,
capital goods and manufactured products.
If the imported goods are originating from other ECO Region Countries (http://www.ecosecretariat.org), imported goods can be of any nature except the
Negative List of Products and up to 100% of the invoice amount can be financed. If the imported goods are originating from non-ECO region countries, then the goods should be capital equipment
(machinery and relevant spare parts), raw material (mainly energy related items such as oil, gas, coal, etc) and intermediary goods except the Negative List of Products and up to 85% of the
invoice amount can be financed.
Export and Import Finance Facilities are provided to increase competitiveness of goods produced in ECO Region Countries; to enhance economic development and job creation and to improve
intro-regional trade for the ECO region.
Buyers Credit: Import Finance Facilities can also be in Seller Credit format whereby the loan proceeds are disbursed to the importer directly while repayments remain the obligation of the
intermediary bank.
Both the export and the import finance facilities shall only be used by exporters/importers which comply with ETDB rules on sector eligibility. Please also see
Negative List of Products of the Bank.
How to Apply
All commercial banks located in ECO Bank Member Countries can apply to be an intermediary bank of ETDB for the Short Term Trade Finance Facility.
Upon finalization of credit review, establishment of a credit limit and signing of the Short Term Trade Finance Facility agreement; financing will be considered for the intermediary
bank.
Exporters/Importers are requested to apply directly to one of the intermediary banks. Requirements for application may vary according to the respective intermediary
institution.
Conditions of financing (interest rate, tenor, grace period, loan period etc) to be applied to end-beneficiaries will be determined by the respective intermediary bank.
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