WHAT IS EXPORT FINANCE:

Export finance refers to the policies, practices and procedures employed in financing export
business. Export financing is the study of the financial network for export trade and includes
the study of export credit institutions, foreign exchange implications, and the methods of
securing payments. Export financing broadly cover all aspects of arranging finance for
export and securing payments from the overseas buyers. Financial facilities are available to
the exporters from the banks even before the shipment of goods and after the shipment of
goods. Besides these facilities from the network of financial institutions, export credit
guarantees and export credit insurance facilities have also been provided to the exporter.

11.2 IMPORTANCE OF EXPORT FINANCE

Finance is important to exporters:
1. To purchase raw materials, and other inputs to manufacture export products.
2. To assemble the goods in the case of merchant exporters.
3. To store the goods in suitable warehouses till the goods are demanded for shipment.
4. To pack, mark and label the goods.
5. To pay pre-shipment inspection costs.
6. To pay freight and insurance charges under C.I.F. quotation.
7. To pay for port, customs and shipping agents charges.
8. To pay export duty or tax, if any.
9. To pay ECGC premium charges.
10. To promote sales of domestic goods in the international markets by way of advertising,
publicity etc.
11. To pay for export documentation charges.
12. To import or purchase in the domestic market heavy capital goods, machinery etc.