BUYERS CREDIT

INTRODUCTION
Buyers Credit is a unique programme of Exim Bank, under which the Bank facilitates Indian
exports by way of extending credit facility to the overseas buyers for financing their imports
from India. Under Buyers Credit Programme, Exim Bank makes payment of eligible value to
Indian exporters, without recourse to them. Buyers Credit is a safe and non-recourse mode of
financing option available to Indian exporters, especially to small and medium enterprises
(SMEs), and motivates them to enter overseas markets. Buyers Credit programme also seeks
to obviate the requirement of opening of Letter of Credit by overseas buyers in favour of
Indian exporters, thereby reducing the transaction cost and also the complexities involved in
financing international trade transactions. The Programme enables Indian exporters to enter
into the competitive international market with the product and financing to enable the buyer
import the same from India. It also frees Indian exporters working capital thereby enabling
them to increase their scale of operations.
(Buyers Credit offered by Exim Bank is different from the Buyers Credit generally
availed by Indian companies by borrowing in foreign currency from international banks, to
finance their imports at competitive LIBOR based interest rates. Buyers Credit extended
by Exim Bank is for financing the overseas buyers imports from India i.e. export of Indian
goods and services)

SALIENT FEATURES OF BUYERS CREDIT

Facilitates exports from small and medium sized Indian companies by providing credit
to overseas buyer to import goods from India.
Can also be offered for financing capital goods or services on deferred payment terms.
Provides non-recourse finance to Indian Exporter by converting the deferred credit
contract into cash contract.
Can also be extended by way of advance payments to Indian Exporters on behalf of the
Overseas Buyer.
Can be a transaction specific financing or a revolving/renewable limit.
Can be extended to more than one overseas subsidiaries of any Indian company.
Non-LC transactions leading to saving of LC charges.

EXIM BANK
8b.(i)

INDIAN EXPORTER
9. EXPORT REALISATION

5a. SHIPMENTS DOCUMENTS

INDIAN EXPORTER'S BANK

8b. (ii) REMITTANCE TO EXPORTER

5b. DOCUMENTS THROUGH EXPORTER'S BANK

8a. DISBURSEMENT TO
EXPORTER'S BANKS NOSTRO

8b. COPY OF FIRC

6. EXPORTER SUBMITS COPY

OF EXPORT DOCUMENTS

EXPORT
DOCUMENTS

10. CREDIT REPAYMENTS

7. DISBURSEMENT DOCUMENTS

4. BUYER'S CREDIT AGREEMENT

3. EXIM CONVEYS SANCTION

2. REQUEST FOR SANCTION

5a. EXPORT SHIPS THE GOODS AND SENDS DOCUMNETS DIRECTLY TO BUYER

1. CONTRACT FOR EXPORT OF GOODS OR SERVICES

PROCEDURAL FLOW

OVERSEAS BUYER (IMPORTER)

IMPORTER'S BANK
(If necessary disb amount can be
remitted to Importers bank.)

DETAILED STEPS INVOLVED

1. Contract for export of goods or services is signed between Overseas Buyer (Importer)
and Indian Exporter.
2. Overseas Buyer requests Exim Bank for sanction of Buyers Credit facility to finance
the import of goods or services under the contract.
3. Exim Bank after due diligence, sanctions Buyers Credit facility to the Overseas
Importer/Buyer (Borrower) on mutually agreed terms that include security, rate of
interest, credit tenure and repayment schedule etc.
4. Exim Bank and Overseas Buyer execute security documents including Buyers Credit
Agreement (BCA) and create security as per the BCA.
5. Indian exporter ships the goods and dispatches export documents; a) either directly to
buyers banker or b) through its own banker in India.
6. Indian exporter submits two sets of non-negotiable copies of export documents to
Exim Bank along with a request letter for disbursement specifying the remittance
instructions.
7. Overseas borrower accepts the documents presented by its banker and makes
arrangement for payment by way of disbursement under Buyers Credit for which, it
forwards payment authorization, promissory note, trust receipt along with payment
instructions requesting Exim Bank to make disbursement under the credit facility.
8. Exim Bank disburses the eligible amount under the Buyers Credit and remits the
amount to Nostro account of Indian Exporters Bank for onward credit to Indian
Exporters account.
9. Indian exporters banker receives payment in its NOSTRO Account, gives credit to the
exporter and issues advices / FIRC to that effect.
10. Overseas borrower services the Buyers Credit extended by Exim Bank, as per the
terms & conditions of the sanction.

INFORMATION REQUIRED FOR CREDIT APPRAISAL

1. Application letter for sanction of the credit facility.
2. Detailed profiles of the borrower company, parent company and group.
(The

Company

profile

should

cover

background,

business

model,

existing

infrastructure, staff strength, any major achievements and accreditations, present

market the proposed borrower is catering to, present market standing, present &
proposed marketing strategy, risks perceived and inherent to the operations of the
company and mitigative steps taken and proposed to be taken by the company)
3. Audited financial statements for last four years, un-audited latest interim financials
for the borrower company/parent company and estimated financials for the current
year.
4. Financial Projections for future tenure of the loan, if transaction involves financing of
new project.
5. Basic constitution documents of the borrower/guarantor company viz., Certificate of
Incorporation, Memorandum & Articles of Association etc.
6. Details of securities to cover the proposed credit facility/ies from Exim Bank.
7. Other information like:
a) List of Board of Directors;
b) List of Key Personnel;
c) Latest shareholding pattern of Borrower/Guarantor Company;
d) Details of present banks and the credit facilities extended by them;
e) Rating rationale of external credit rating if any, obtained by the Company;
f) Copy of D&B report.
g) Details of the Legal counsel
8. Any other information, which will have bearing on the operations of the company/ies.
9. 36DPX 1 form if the exports are on deferred payment terms.

DOCUMENTS TO BE SUBMITTED BY THE BORROWER AT THE TIME OF EACH DISBURSEMENT:

1. Request letter from Indian Exporter for disbursement, specifying the remittance
details where the disbursement amount is to be remitted
2. Non-Negotiable copy of Shipping Documents
3. Promissory note covering the eligible value (disbursement amount) of export contract
4. Trust receipt covering value of consignment financed by disbursement under the
Buyers Credit facility
5. Authorization letter from Borrower to disburse the eligible value under the Buyers
Credit facility and remit it to the Indian exporter.

FREQUENTLY ASKED QUESTIONS (FAQS) ON EXIM BANKS BUYERS CREDIT PROGRAMME

1. What are the benefits of Buyers Credit to the Indian Exporter?
Buyers Credit is a safe and non-recourse mode of financing option available to Indian
exporters, especially to small and medium enterprises, and motivates them to enter
overseas markets. Indian Exporter can offer package deal to its buyer by arranging
finance for the overseas buyer under Buyers Credit programme of Exim Bank. From
regulatory point of view, value of exports received under Buyers Credit is considered
to be export realization, and exporters banker can also extend finance to Indian
Exporter, thus meeting his pre-shipment finance requirements.
2. What are the benefits of Buyers Credit to overseas importer of Indian goods and
services?
Buyers Credit can be sanctioned as limit or one-time credit. No need of issuing LC in
favour of Indian Exporter hence saves cost on LC issuance. The facility can be
extended in USD/Euro/GBP/YEN. Besides Head Office, overseas Buyer can approach to
Exim Banks Branch in London as also the Overseas Representative Offices located in
six different places in the world (list of overseas is at last page).
3. What are the goods eligible for being financed under the Buyers Credit
programme?
Under Buyers Credit programme, export of capital goods, plant and machinery,
industrial manufactures, consumer durables and any other items eligible for being
exported under the Foreign Trade Policy of the Government of India can be financed.
4. What is the credit period allowed under Buyers Credit programme?
Credit period of Buyers Credit extended for working capital depends upon the working
capital cycle of the overseas buyer. It may vary from 30 days to 360 days for working
capital limits depending upon the requirement of the overseas buyer. Credit period of
Buyers Credit extended for Capital goods may vary from more than one year to 10
years, depending upon the cash generation capacity of the overseas buyer.

EXPORT-IMPORT BANK OF INDIA

HEAD OFFICE
Centre One Building, Floor 21,
World Trade Centre Complex Cuffe Parade,
Mumbai 400 005.
Phone: 91 22 22172600
Fax: 91 22 22182572
E-mail: eximloc@eximbankindia.in
Website: www.eximbankindia.in
LONDON BRANCH
88/90, Temple Chambers, Ground Floor,
3-7 Temple Avenue, London EC4Y OHP
United Kingdom
Phone: (0044)20 / 73538830
Fax: (0044)20 73538831
E-mail: eximlondon@eximbankindia.in
OVERSEAS OFFICES
ADDIS ABABA
Bole Kifle Ketema, Kebele - 19, (03/05),
House No. 015-B,
Addis Ababa, Ethiopia
Phone: +251 116 630079
Fax: +251 116 610170
E-mail: aaro@eximbankindia.in

JOHANNESBURG
Floor 2, Sandton City Twin Towers East
Sandhurst Ext-3, Sandton 2196,
Johannesburg, South Africa
Phone : 00 2711 3265103/13
Fax : 00 2711 7844511
E-mail : eximjro@eximbankindia.in

DAKAR
1st Floor, 7, 7, Rue Felix Faure, B.P. 50666,
Dakar, Senegal.
Phone : + 221 - 33 - 8232 849.
Fax : + 221-33-8232 853
E-mail: eximdakar@eximbankindia.in

SINGAPORE
20, Collyer Quay, # 10-02 Tung Centre,
Singapore 049319
Phone : (0065) 65326464
Fax : (0065) 65352131
E-mail:eximsingapore@eximbankindia.in

DUBAI
Level 5, Tenancy 1B,
Gate Precinct Building No 3,
Dubai International Financial Centre,
PO Box no. 506541, Dubai, UAE.
Phone : 00 9714 363 7462
Fax: 00 9714 363 7461
E-mail : eximdubai@eximbankindia.in

WASHINGTON D.C.
1750 Pennsylvania Avenue N.W., Suite 1202,
Washington D.C. 20006 , U.S.A
Phone : (001) 202-22332 38
Fax : (001) 202-7858487
E-mail : eximwashington@eximbankindia.in