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Trade Finance

In line with its mission to initiate, to promote and to provide financial facilities to expand intra-regional trade and to promote the economic development of its member countries, ECO Bank extends short-term loans to selected banks in its countries of operations.

These loans are structured to fund trade-related advances to local companies exclusively for the purpose of pre-shipment finance, post-shipment finance necessary for the performance of foreign trade contracts. Credit agreements are signed between the ECO Bank and the selected banks.

All commercial banks based in ECO Bank member states with an established record of trade finance operations are eligible to apply to join this programme. All applications will be assessed by related departments of ECO Bank and application results will be informed to the applying bank or the financing institution.

Short Term Trade Finance Facility

Export Finance Facility is developed to provide advance financing to exporters of ECO member countries to produce manufactured goods, commodities and agricultural products for export and also developed to extend deferred payment terms for the buyers, if needed. Loans may cover both pre-shipment and/or the post-shipment (shipments date back upto 1 month) periods of an export transaction.

Exporters may utilize funds through ECO Bank intermediary banks under this facility within a period not exceeding two year. Shipment should take place within the tenor of relevant disbursement (if not stated as post shipment by the borrower financial institution). ECO Bank Export Finance Facility provides financing to transactions up to 100 % of the invoice amount when exported goods are produced in the ECO Bank Member Countries.

Import Finance Facility is provided through ECO Bank intermediary banks to buyers/importers based in ECO Bank Member Countries to finance imports of commodities, capital goods and manufactured products.
If the important 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.

The facility shall only be used by exporters/importers which comply with ECO Bank 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 ECO Bank to be an intermediary bank 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 loan agreement; financing will be available for the intermediary bank for their use.

Exporters/Importers are requested to apply directly to one of the intermediary banks and financing institutions, which operate on a national base. Requirements for application may vary according to the respective intermediary institution.

Conditions of financing (interest rate, tenor, grace period, loan period etc) are determined by the respective ECO Bank intermediary bank.