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Financing and risk coverage of the venture

Financing of exports of Jaipur handicrafts is done majorly by the export – import bank of
India (EXIM bank ).

FINANCE FOR JAIPUR HANDICRAFTS

Exim bank has helped Jaipur Handicrafts in the following ways :-

Term Finance
• Project Finance
• Equipment Finance
• Import of Technology & Related Services
• Domestic Acquisitions of businesses/companies/brands
• Export Product Development/ Research & Development
• General Corporate Finance

Working Capital Finance

Working Capital Term Loans [< 2 years]

○ Long Term Working Capital [upto 5 years]


○ Export Bills Discounting
○ Export Packing Credit
○ Cash Flow financing
• Non-Funded
○ Letter of Credit Limits
○ Guarantee Limits

Export Finance
• Pre-shipment Credit
• Post Shipment Credit
• Buyers' Credit
• Suppliers' Credit [including deferred payment credit]
• Bills Discounting
• Export Receivables Financing
• Warehousing Finance
• Export Lines of Credit (Non-recourse finance)
Equity Participation (In Jaipur Handicrafts)
• To part finance project expenditure(Project, inter alia, includes new
project/ expansion/ acquisition of business/company/ brands/research &
development)

CONFIRMATION OF LETTERS OF CREDIT (L/C) BY EXIM BANK UNDER THE


GLOBAL TRADE FINANCE PROGRAM (GTFP) OF THE INTERNATIONAL
FINANCE CORPORATION (IFC), WASHINGTON DC.

Features of the Program


• The program currently covers 74 countries of IFC's operation listed below and Exim
Bank may confirm the L/Cs & other trade instruments issued by pre-approved banks
for supporting Jaipur handicraft's exports to these countries:

Afghanistan DR Congo Mali Seychelles


Sierra
Albania Ecuador Malta Leone
South
Angola Egypt Mauritania Africa
Argentina Gambia Mauritius Sri Lanka
Armenia Georgia Mexico St. Lucia
Azerbaijan Ghana Moldova Syria
Bangladesh Guatemala Mongolia Tajikistan
Belarus Haiti Mozambique Tanzania
Benin Honduras Nepal Togo
Bhutan Indonesia Nicaragua Turkey
Bolivia Jordan Niger Uganda
Kazakhsta
Brazil n Nigeria Ukraine
Burkina Faso Kenya Pakistan Uruguay
Papua New
Burundi Kosovo Guinea Vietnam
Cambodia Lebanon Paraguay West Bank
China Liberia Peru Yemen
Madagasca
Costa Rica r Rwanda Zambia
Cote d'Ivoire Malawi Russia
Dominican
Republic Maldives Senegal

• Exim Bank’s L/C confirmation will cover the risk of non-payment by the Issuing
Bank.
• Pricing : The fee payable to Exim Bank (including fee payable to IFC) for adding
confirmation to the L/C will be advised by Exim Bank along with the approval for
confirmation of L/Cs and other trade instruments. The fee will be payable before
confirmation of instruments by Exim Bank.

How it works
• Under the program, an importer of Jaipur handicraft goods in any of the above
countries will approach a bank for opening an L/C. The L/C Issuing Bank should be
on IFC’s list of pre-approved banks. Either the L/C Issuing Bank or Jaipur handicrafts
may request confirmation of the L/C from Exim Bank, as per the attached Application
Form. Jaipur handicrafts are welcome to discuss the transaction before sending a
formal request for L/C confirmation to Exim Bank.
• Exim Bank will convey availability or otherwise for confirmation of the L/C and, if
agreed to confirm, the fee payable by the Jaipur handicrafts / L/C Issuing Bank. L/C
will be governed by UCPDC-600.
• L/C Issuing bank shall not, without Exim Bank’s prior written consent, amend the
terms of the L/C.
• Jaipur handicrafts will ship the goods covered under the contract and shall present the
documents for negotiation to his bank. The Negotiating/ Paying Bank will ensure that
the documents are as per the terms of the L/C and shall make payment under the L/C
to the Indian exporter. The Negotiating/Paying Bank will forward the documents to
the L/C Issuing Bank. Negotiating/Paying bank shall keep Exim Bank informed on
each disbursement made to the Indian exporter under the L/C and each claim for
payment made to the L/C Issuing bank and amount received by the
Negotiating/Paying Bank from the L/C Issuing bank in settlement thereof, till
retirement of the L/C.
• Exim Bank can also be the negotiating bank.
• In the event the L/C Issuing Bank fails to reimburse the Negotiating/Paying Bank,
Exim Bank will pay the Negotiating/Paying Bank as per the terms and conditions of
L/C confirmation.

EXIM BANK’S PARTICIPATION IN GLOBAL TRADE FINANCE PROGRAME


OF INTERNATIONAL FINANCE CORPORATION
FLOW CHART OF TRANSACTION MECHANISM FOR L/C CONFIRMATION
Exim Bank offers a diverse range of information, advisory and support services, which
enabled Jaipur handicrafts to evaluate international risks, exploit export opportunities
and improve competitiveness.