Meaning of Pre-Shipment Finance

Meaning of Pre-Shipment Finance

Pre-shipment finance refers to the credit extended to exporters prior to the shipment of goods for the execution of export order. It is also known as 'Packing Credit. It, refers to any loan granted to an exporter for financing the purchase, processing manufacturing or packing of goods as defined by the Reserve Bank of India.

 

Pre-shipment finance is of particular importance to small scale manufacturers and exporters who do not possess sufficient financial resources to meet the expenditure involved in the production of goods for export. Exporters can get pre-shipment credit from:

 

(a) Indian commercial banks.

(b) Branches of foreign commercial banks in India.

 

 

 

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